When Ardian decided to invest in Swissbit, a Swiss manufacturer of storage and embedded IoT solutions, it was in the midst of Covid-19’s 2020 lockdown. The acquisition process was virtual up until its last few days, and then the first year and a half of collaboration was shaped by stressed supply chains.
How did Ardian and Swissbit handle this strained period? First, by securing the supply chain. This is why Swissbit acquired Hyperstone, a long-term supplier, which further strengthens its control over its value chain. Now, the company plans on enlarging its product portfolio and to deliver added value, especially in the area of cybersecurity.
To learn more about this successful partnership and Swissbit’s vision, Colette Davidson traveled to Berlin to meet with Silvio Muschter, CEO of Swissbit and two members of the Expansion team of Ardian, Dirk Wittneben, Head of Expansion Germany, andYannic Metzger, Director.
It's important today to have your supply chain under control. From the beginning to the end of the product, we have no interaction, no interruption from third parties, and this makes us unique.
Shortly following our investment in Swissbit, the first major strategic add on acquisition was signed in December 2020. The acquisition of Hyperstone is a catalyst for Swissbit's development since it adds significant microcontroller and software know-how, reducing time to market for new product development through integrated development processes.
When you’re a world-leading private investment house, there’s more to your business than market growth. It’s about connections, relationships.
Ardian, a French-based private equity investment company, is constantly building its portfolio - to strengthen its partnerships, offer its expertise and remain true to the spirit of entrepreneurship.
Welcome to Entrepreneurial Journeys, a podcast all about Ardian’s commitment to building better business, together. In each episode, we’ll learn about Ardian’s growing global network.
I’m your host, Colette Davidson.
The world of business is changing rapidly. And with that comes the need for technology solutions that move with the times. Companies today are looking for storage and security solutions that are high quality, reliable and adapted to their demanding applications.
That’s where Swissbit comes in. Based in Switzerland and with offices in Germany, the US, Japan and Taiwan, Swissbit is a European leader in industrial-grade storage, security and embedded Internet of Things solutions for critical applications.
In 2020, Ardian joined forces with Swissbit, and acquired a majority stake in the company. Since then, Ardian has provided its investment expertise, working with Swissbit to take the company to new levels of growth.
I visited the Swissbit office in Berlin, Germany - home to its manufacturing plant - to meet with Silvio Muschter, CEO of Swissbit, Dirk Wittneben, Head of Ardian’s Expansion team in Germany, and Yannick Metzger, Director in the Expansion team at Ardian to learn more about this unique partnership.
So, Silvio Muschter, you are the CEO of Swissbit. Hello.
Can you just tell us about the company's history first?
Yes, for sure. Swissbit was founded actually in 2001. It was a management buyout out of Siemens. As the name Swissbit indicates, we are a Swiss company, headquartered in Bronschhofen in Switzerland. And in the beginning of the company, actually, we produced mainly DRAM modules, for many, many markets. Also for consumer end markets at the time. The financial crisis around 2008 caused the restructuring of the market, and so we were forced kind of to reinvent ourselves because this market didn't exist anymore. And what we did at the time was to start focusing on industrial markets.
So we are a 100% industrial focused company since then. And that was the major shift, let's say, in the perspective of the company.
What makes Swissbit special? Why do you think you're so successful in the market?
Our products fulfill highest industrial standards, especially for, sensitive data. We guarantee endurance, robustness and under extreme conditions, like telecommunications applications in the mountains or somewhere extreme or in factory environments. Our customer base includes some of the largest company, like Siemens, Nokia, others. And they trust in Swissbit’s high, quality and reliability of the products and they are made in Europe, which I think today is also very important.
…I think it's interesting, this Made in Europe concept… Are you one of the only companies… of your type producing in Europe?
Yeah, absolutely. I mean, today we see cybersecurity being an issue, supply chains being disrupted. We have all those things going on with Russia, China, Taiwan at the moment. And I think being decoupled from those supply chains is a big advantage today. Still, yes, we have suppliers also in those areas. I think the world will stay connected in a way, but we can do a lot of things here. And especially if you have products which could carry, cyber threats within the controller, within the software of the product, it's important today to have your supply chain under control. We can say from the beginning to the end of the product, we have no interaction, no interruption from third parties, and this makes us unique.
And now we can maybe talk about your partnership with Ardian. Why was it important for the company to enter into this partnership? What was missing?
Yeah, the main shareholder and founder was looking to sell the business at the time and the management team was looking for a strong partner to support us. What was actually important was a good network with experience and also with the power to support our ambitions. Right after this transaction, we acquired a company, and we had excellent support from the Ardian team at this time. I could not mention to do this without their support. We had no experience in this area so this was one of the very big contributions to our partnership.
Thank you, Sylvio. And Dirk Wittneben, you're the Head of the Ardian Expansion team in Germany. Hello.
Hello, nice to meet you.
Nice to meet you too.
So can you tell me about the transformation of Swissbit since it teamed up with Ardian?
So, shortly following our investment in 2020, the first major strategic add on acquisition was signed in December 2020. Silvio mentioned it already. Hyperstone, a German developer of industrially great memory controllers and a long term supplier of Swissbit, was acquired from its corporate shareholder. In fact, the acquisition of Hyperstone is a catalyst for Swissbit's development since it adds significant microcontroller and software know-how, reducing time to market for new product development through integrated development processes. Meanwhile, the integration of Hyperstone is complete and further strengthens Swissbit's control over the value chain, guaranteeing access to highests quality microcontrollers in light of the current scarcities in the market.
And… Yannick Metzger, you are a Director in the Expansion team at Ardian. Hello.
Can we go into detail on some of the evolutions you've seen since the partnership with Ardian?
I think the already mentioned acquisition of Hyperstone, which Silvio and Dirk both already stressed, is a very good example of us supporting the company during all steps of such a strategic project. We took some work off management's shoulders, but management is always the key driver behind such a project. That was the first evolution I was aware of and that was visible for me. Management really pushed for this acquisition. It had a clear strategic goal and we were the partner that helped executing that strategic vision. I think we already see that the acquisition of Hyperstone increased Swissbit's added value and USPs, they are now controlling more and more parts of the value chain and creating promising ideas for new products. We see a clear trend towards a faster time to market, increased internal transparency and operational excellence, resulting in strong growth and innovation despite challenges in the supply chain that we saw in the last years. Me personally and the rest of the Ardian team are very impressed by how management performed during these crisis times, and we're very happy with the performance so far.
And how does the interaction look like on a day to day basis?
I think the interaction highly depends on the status and urgency of ongoing projects. On top of our regular exchanges on corporate strategy and our quarterly board meetings, we frequently discuss operational projects and areas for improvement. We always try to leverage our best practices from other investments we're taking care of and bring in our knowledge and industrial advisor set-up. We have a very open and trusted relationship with Silvio and the team that is shaped by transparency and integrity, I'd say. In practice, we speak almost every week, sometimes only a few minutes to update each other on pressing subjects, sometimes longer, to drill down into complex topics and to find the right way forward.
…did you encounter any challenges when you first started, or were there areas that needed more work or more specialization?
I think the first challenge we encountered was during the acquisition process, which like Silvio already mentioned, was completely virtual until the last days of the process. So we all had to settle down in this new environment, make an M&A transaction, all from our desks at home, and then finally have the chance to meet the people in charge during the last days of the process. So the first challenge we had to face, was already before we even invested into Swissbit. After that, I think the first 12 or 18 months of our collaboration were also shaped by stressed supply chains. Getting enough supply from our international supplier network, was always a challenge, which from my point of view, was very well managed by the incoming management team. And that shows that experienced management teams are extremely important in highly technical business models.
And Dirk, if we can come back to market development, what has your strategy been? What do you expect from Swissbit going forward?
Yes, so first of all, we expect a lot. Seriously, we have seen that Swissbit's core business development and manufacturing of high end memory for demanding applications has performed very well over the last years. This segment was the backbone of our investment thesis. Now we clearly plan to further grow this market leading business with new and existing clients and to extend the offering in the embedded IoT and microcontroller segment where we see high growth potential in the future.
And Silvio Muschter, how do you see the company in the near and long term future?
My vision for the company is to enlarge the product portfolio, especially with the mission critical components, and to deliver added values, especially in the area of security, cybersecurity, which are required for our customers to realize their next innovation steps. In this context, yeah, the focus on cybersecurity, is one of the keys. I think it's everywhere and very present today, this is important in the future. This will allow us to further differentiate ourselves in the markets and having, let's say, at once security features embedded in our solutions even more. So to expand the securities portfolio with particular focus on the integration of software and services, this is something we imagine for the future to be the biggest growth factor. On top of this, we also strengthened our strategy by entering new market segments, the data center market, for example. Swissbit follows here its market approach to combine the high quality and the customization of products for those demanding applications.
Thank you, Silvio Muschter, Yannic Metzger and Dirk Wittneben.
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Entrepreneurial Journeys is a podcast about Ardian’s commitment to building lasting change, by partnering with managers to build resilient, high-quality businesses that are fit to face the future.
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