Christian has a proven track record in developing high growth technology businesses and currently acts in advisory roles for global investors, PE and VC firms, including acting as strategic advisor for Temasek Holding (Singapore). In addition, he invests in and advises fast-growing technology and value-based companies including Scandion Oncology (DK), Dear Leader (DK), Tessa Therapeutics (Singapore) and Friday SmartLocks (UK).
As CEO & President, he grew Heptagon exponentially since joining in 2010, resulting in an excess of $1bn trade sale to ams AG in late 2017. Prior to joining Heptagon, Christian served as CEO for Singapore-based Hymite that was sold to TSMC, a leading global semiconductor foundry. Before Hymite, he worked in Shanghai, China as senior vice president at Jabra-GN, a global maker of headset solutions. Christian has previously served as board member in several technology and IP companies, ranging from listed conglomerate GN Great Nordic, Swedish late stage start-up Flatfrog Laboratories and Scandinavian IPR firm Zacco.
Christian, I would like to take the opportunity to thank you for all the hard work to grow Heptagon into a billion dollar exit success story as it was acquired by ams AG. It is one of the ‚Äúhidden‚Äù recent fantastic European technology success stories. Was this what you expected when you joined the company back in 2010?
To be honest, I had a very different set of¬†expectations, joining Heptagon. The company was losing double-digit millions that year, it had a hard time growing the business and it really seemed like an¬†uphill battle, more designed for an aggressive cost-down and¬†subsequent IP sale. I was asked initially by the Asian investors of Heptagon to review the business and I was warned that it could be a very negative conclusion I would end up with. At the same time, they made it clear that we were in it together which gave my team a high degree of¬†confidence to explore different ways of addressing the business challenges.¬†No-one could have expected – nor hoped for – a 50x growth, revenue-wise, over the past 7 years. But relatively quickly, we determined that we had something unique, technology-wise, we knew we had a strong core-team and we really wanted to go for the moon-shot of embedding our technology into consumer mobile devices.
Kreos provided growth lending facilities to Heptagon during the period 2007-2008, and there were certainly some challenging moments during the macro financial crisis in 2009-2010, but all stakeholders showed support and the company managed through. What were the key success factors and decisions made to be able to manage through that difficult period?
Kreos was actually one of my first¬†‚Äúchallenges”, having to engage with a¬†knowledgeable stakeholder¬†group who had been through too many broken promises: – I recall my first meeting with M√•rten and the team in London, where we laid out the situation and the strategy/plan moving forward. There were a lot of questions – and many of them quite good albeit somewhat critical – that we were forced to consider, and we really took the input seriously.
Kreos is obviously a financial investor but with clear commercial focus and understanding – you feel that immediately when engaging with Kreos. At the end of the first meeting, we had a much better mutual understanding which I believe led to a way forward – and ultimately moved Heptagon from a company going side-ways to a successful growth story. So, was there a single key factor? Probably not – the turn-around was based on a number of complex factors as well as a large degree of, well, luck. That said, I keep coming back to one thing: complete honesty. We decided as a management team to be open to the extreme with our stakeholders and the stakeholders responded in return with a much higher degree of confidence and even risk-willingness in the process.
Given the global nature of the business with operations on 3 continents, what is your experience of building the financing structure for Heptagon over the years and the support from investors?
Heptagon had a global shareholder base, including leading investors from the US, Singapore, China and Europe. This presented a much more complex shareholder engagement initially, but also allowed us to engage and seek deep and broad advice from our¬†shareholder base. I would respectfully argue that European investors are¬†somewhat more risk-averse than Asian investors. However, they contribute very actively to the growth strategy and are quite active when it comes to the financial planning. Heptagon would not have been what it is today without the deep engagement we had with each of the stakeholders. We were allowed to think bigger than what you normally are brought up to do as a European-based company.
Heptagon moved from being a Finnish company to a Swiss company and eventually having its largest operation in Singapore and addressing global customers. How were you able to deal with all the international cultures, time differences, local operations etc. and at the¬†same time grow the company in such an explosive way?
The interesting thing with Heptagon is that it truly is, and always have been, a¬†global company – we employed more than 20 nationalities and as mentioned above, we had a very global shareholder base. Our board was represented by US, China, Singapore, France, Denmark and Taiwan. We made this challenge a strength. Initially, we called ourselves the worlds’ smallest global company‚Ä¶. I guess after surpassing 7,000 employees this is no longer the case. But we acted as a small company. We wanted to stay focused and at the same time, open for new ideas and ways of problem-solving. We took the best from each culture and combined it. As an example – initially we had great challenges with manufacturing in Singapore the products designed in Europe (which is not an¬†uncommon problem for European-based engineering companies). We turned this around and insisted that product design move much closer to operations and only maintained the proto-lines in Europe. This had several quite positive results: Not only could we re-assign a large engineering team in Singapore towards product design, we could expand our focus on fast-technology development and, somewhat surprising, we realised that we brought the engineering and operations team much closer together. We made everyone accountable in a positive way. When we came up with ideas, everyone contributed – and when we encountered challenges (and we had plenty of them, too) the same group was also willing to actively engage in¬†the problem-solving.
Can you tell us a little bit about how Heptagon has been part of transforming the optical sensor industry for smartphones and where you see the technology and related applications and services heading?
This could be a very¬†lengthy story, but to make it over-simplified, we were ultra-focused at Heptagon on our key¬†strengths, making ultra-small and quite complicated optical¬†sensor systems. We have been convinced – and put our money behind this – that the world will benefit from great expansion of sensors and this will facilitate the way we engage and the way we live. We focused on optical sensing, our core¬†expertise, and added complimentary technologies hereto, including 3D and spectral applications. Whilst the industry focused on imaging and optics we decided to use or optical capabilities and know-how to take a¬†different direction and focus on optical sensing. In short, we locked in to our¬†‚Äúniche‚Äù which luckily quickly became main stream.
What was the main reason behind selling Heptagon to ams AG rather than continuing to build the company towards an independent IPO?
Originally, we actually did pursue an IPO and had back in 2011/2012 made a confidential filing, getting ready for a public life! We had very deep deliberations with our board and key shareholders in respect to pro & cons of an IPO. We were obviously attracted to the public markets and creating a more valuable (and¬†bankable) equity for M&A however, we also realised that we as a company needed a complete focus to implement the aggressive growth plan rather than spending valuable¬†management time on public markets management. At the end of the day, we were fortunate to have the right¬†investor base that could carry us through quite capital-intensive times without need to reach out to public markets.
The ams AG sale was also a very logical -¬†albeit not exactly planned.¬† When the opportunity came up, our board responded very quickly and enabled us to focus on an intensive negotiation process rather than having to manage both internally and externally. Combining with ams – that had a strong base in optical chips and electronics and a shared customer base with us, gave us the missing link¬†to create a complete optical system, without any direct competition, globally. As such, it was a no-brainer to combine the¬†businesses.
What has been your biggest learning experience from the Heptagon journey, and would you do it again?
Absolutely yes. I would do everything again. It may sound cheesy but the process and what we jointly achieved was so much more rewarding than the end-result, a successful (and quite rewarding!) sale. The Heptagon team created something unique and I am proud to have been part of this. We created a company culture that at the same time was aggressive, balanced and people-oriented. We were individualist but acted as one group. This was always the key; acting as a group. I once read an interesting study comparing a group of kindergarten kids‚Äô building structures that consistently¬†exceeded¬†same task performed by a group of highly educated business school students‚Ä¶why was this? The kids had absolutely no¬†internal competition and was much more focus on the task at hand‚Ä¶‚Ä¶with the risk of offending my team, I like to compare us to the¬†kindergarten group. We acted as a single entity, our behaviour was efficient and effective. We kept it simple. This really represented the Heptagon team. We moved quickly, spotting problems and offering help. We experimented, consistently took risks and we never competed for status.¬†In short, we became a group that added up to be greater than the sum of the parts. This is probably the biggest take-away from the Heptagon journey.