The Foundry makes digital visual effects software that has been used in motion pictures like Tron Legacy 3D, Avatar, Harry Potter and many others. Private equity firmあThe Carlyle Group just acquired a majority stake in the Foundry from Advent Venture Partners and other stakeholders. The details of the transaction have not been made public.
Making a movie involving digital visual effects is a complicated and technically sophisticated business. In fact, the visual rendering farmsあused for movies like Happy Feet or Lord of the Rings rank among the top 500 supercomputing centers in the world. Each film sequence combining live action and visual effects involves a huge number of visual elements that must be integrated into a final, polished product. The Foundrya4ぎa4г software creates rough combinations of these elements (a process called compositing) in a visual representation that can then be refined by dozens of artists. The video below shows some work created using Nuke, The Foundrya4ぎa4г core compositing product.
I talked to Mike Chalfen, a partner at Advent Venture Partners, The Foundry&'s main investors, about the deal. He contends that this deal is a validation of the firm&'s growth investment strategy. Growth investment means investing in a business that has a proven business model and technology and is usually already profitable but wants to expand. Venture capitalists tends to invest in newer products and markets.
Advent only invested in The Foundry 2 years ago. Chalfen told me that The Foundry is a typical growth investment deal. The company makes a complex product that is hard to replicate and that there was a pent-up sales demand that was not being satisfied. The company expanded 100 percent in 2009.
I asked Chalfen about the growth investment climate in Europe. He told me that he is feeling bullish about the tech market in Europe. It has become less important where a company is based. According to Chalfen, in the US massive companies are created very rapidly, but it is often easier to find truly differentiated companies in Europe. However, he is of the opinion that too many European founders here fall in love with their technology at the expense of the business aspect. European technology and American business savvy could be a match waiting to happen.
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Companies: The Foundry
Companies: The Foundry
Ciara Byrne is a full time techie and part-time writer. She has worked as a software developer, team lead, engineering manager and mobile standards expert. Ciara is based in Amsterdam and her interests include creative companies, useful technology, torture by piano and cycling in high heels. Follow her on Twitter at @deciara.
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