For this month’s special MVPro Magazine, ‘Showcase’, Matt Williams spoke with Chris Yates, a Partner at Mergers & Acquisitions firm Vision Ventures. Chris outlines the history of the company, discusses the biggest developments in the industry, and predicts how the industry will advance over the next few years.
MW: Can you start by giving us a background on Vision Ventures?
CY: Vision Ventures is the leading global M&A advisory firm dedicated to Vision Tech. The company was founded by our Managing Partner, Gabriele Jansen in 2012 with a recognition that the machine vision industry would continue to grow in strategic importance for many multinationals. At the same time, there was a clear need to support both strategic acquirers in navigating the highly technical vision industry to secure successful acquisitions, and to support the many founders and owners of successful vision companies through the process of a company sale.
Vision Ventures typically supports either sell-side or buy-side strategic transactions with expert advisory and transaction management support. Sell-side mandates support company owners and shareholders in securing a sale with an attractive acquirer. As well as financial considerations, it is often important to ensure a match of culture and future aims between buyer and seller, which is only achieved through a deep understanding of the entire machine vision ecosystem.
There is continued and growing interest in buy-side transactions with both larger corporations as well financial investors identifying vision tech as a strategic, high-growth, and attractive segment. Vision Ventures supports buy-side clients with expert insight that includes developing effective acquisition strategies, identifying potential target companies, and detailed support for valuation and due diligence processes.
MW: What can you tell us about the founders and partners at Vision Ventures?
CY: The senior team at Vision Ventures consists of three partners, each of whom are coming directly from within the machine vision industry and have each founded and led vision companies with innovative technology through growth to successful exit transactions. Gabriele is the founder and Managing Partner of Vision Ventures. With almost 30 years of experience in vision, predominantly as an entrepreneur, clients benefit from her unique combination of industry insights, technological expertise, and entrepreneurial vision.
I have over 20 years’ experience in industry with a focus on early-stage technology in multiple start-up companies. I moved to Vision Ventures from the role of Director, Advanced Technology at Rockwell Automation. I was previously the CEO and founder of industrial 3D imaging specialist, Odos Imaging, which I led from inception until acquisition by Rockwell Automation in late 2017. I am also the current President of the EMVA, having served on the board since 2017.
Holger Hofmann has more than 25 years of experience in vision technologies, holding management positions in several international vision companies. Clients benefit from his comprehensive knowledge about vision markets, key market players and their market relevance, application trends and customer ecosystems.
MW: What would you say are the most recent interesting developments in the industry?
CY: Several macrotrends across the vision tech sector will continue to provide significant opportunities for companies of all sizes. For example, the drive to digitalisation is shaping the evolution of the vision tech market. Mass digitalisation of industrial processes to create a unified product lifecycle, from design, through manufacture, and deployment offers many opportunities for vision tech such as the definition of inspection and metrology plans at design time or the use of vision to analyse manual assembly operations and bring quantitative techniques to this most complex variable application area.
The increasing use of AI-based vision systems is also creating an entire technology ecosystem with many companies developing low-code/no-code toolchains to help ease the development and deployment of AI models. Other aspects of the ecosystem which may gain in importance include the use of fully synthetic data to train models, as well as tools to quantify and validate model robustness and security. Many companies are also understanding the value of additional insights which can be extracted from automated quality measurements, such as using higher-level trend analysis to predict tool performance and support preventative maintenance.
AI technology is also empowering the use of vision technology to support manual processes within manufacturing. Traditional machine vision in factory automation has often been targeted toward automated inspection. However, several companies are realising the benefit in either supporting, analysing, or assisting manual operations, and using vision tech as the means to do so, for example digitally tracking manual processes for quality control, or providing dynamic visualisation of assembly operations.
Another area with tremendous opportunity is embedded vision. The combination of inexpensive low power computing, freely accessible AI toolchains, and high-quality image sensors, means that extremely powerful vision systems can be constructed targeted to many different application domains. Where previously the need for a PC and electronic cabinet might have ruled out the broad proliferation of such applications, embedded vision is providing value in consumer home goods, agricultural sensing, medical devices, waste recycling and many more domains. Vision has the potential to become truly ubiquitous, and it is an outstanding success of the vision industry that many companies are developing vision systems targeted to specific domains while using the same fundamental technology building blocks.
We also expect the increase in non-traditional imaging technologies to continue to grow in visibility and adoption across end-user applications. Imaging is the foundation of the machine vision industry and the extension to hyperspectral, SWIR, UV, 3D, polarisation, x-ray, event-based and terahertz technologies will continue to increase the scope of the vision tech market.
MW: Lastly, how do you see the industry developing over the next five years?
CY: The story of the emergence from the pandemic of 2020-2021 has been one of strong customer demand but coupled with difficulty to supply products and solutions. This has led to an increase in both orders and order backlog with many companies seeing over-proportional growth in revenue during 2022. However, as supply constraints recede there may be a re-balancing during 2023 reducing backlog, and eventual return to the healthy growth rates prior to the war in Ukraine, the current high inflationary environment, and the tightening of monetary policy from central banks.
It is also likely that the trend for consolidation through acquisition in the machine vision market will continue over the comping years. Many multinationals continue to view industrial automation as a strategic necessity, which will certainly provide competition for the acquisition of attractive companies in the vision tech sector. Companies who have developed valuable new technologies or are effective at establishing themselves in the market, can expect to be targets for both acquirers and investors.
Although in recent years we have seen several large consolidation projects being developed, an overall trend toward a machine vision market dominated a by a few large companies, may be some way off. While the key components of any vision solution such as sensors, compute, and image processing are widely available and understood, the sheer variety of customer application tasks which require vision results in an almost infinite variety of technology combinations. This diverse set of customer needs ensures that the market is open to new companies with specific domain or technology expertise and acts to restrict mass consolidation. Although the 2020’s have started with multiple challenges and renewed global uncertainty, machine vision remains one of the most attractive investment themes, a highly innovative sector backed by strong demand, and a source of solutions which provide real value to end-users for many decades to come.
You can read this interview, and many others, in ‘Showcase’. Click here to read/download.
