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When you're a world-leading private investment house, your business is about more than just market growth. It's about connections, relationships.
Ardian, a France-based private equity investment firm, is constantly expanding its portfolio to strengthen its partnerships, offer its expertise and stay true to its entrepreneurial spirit.
Welcome to Entrepreneurial Journeys, a podcast focused on Ardian's commitment to building better businesses together. In each episode, we learn more about Ardian's growing global network.
I'm your hostess, Colette Davidson.
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The business world is changing rapidly. And with that comes the need for technological solutions that evolve over time. Businesses today are looking for storage and security solutions that are high-quality, reliable, and customized for their demanding applications.
This is where Swissbit comes into play. Headquartered in Switzerland with offices in Germany, the US, Japan, and Taiwan, Swissbit is the European market leader in industrial-grade storage, security, and integrated Internet of Things solutions for mission-critical applications.
In 2020, Ardian merged with Swissbit and acquired a majority stake in the company. Since then, Ardian has brought his investment expertise and partnered with Swissbit to take the company to a new level of growth.
I visited the Swissbit office in Berlin, Germany, where the factory is located, to meet with Silvio Muschter, CEO of Swissbit, Dirk Wittneben, head of Ardian's expansion team in Germany, and Yannick Metzger, head of Ardian's expansion team. Ardian. For more information on this unique partnership.
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(Introductions)
Colette:
So Silvio Muschter, you are the CEO of Swissbit. Hello.
Silvio:
Hola.
Colette:
First, can you tell us a bit about the history of the company?
Silvio:
Yes of course. Swissbit was founded in 2001. It was a takeover by Siemens management. As the name Swissbit suggests, we are a Swiss company based in Bronschhofen, Switzerland. And at the start of the company, we were actually primarily producing DRAM modules for many, many markets. At that time, also for consumer end markets. The financial crisis around 2008 caused a restructuring of the market and we were forced to reinvent ourselves because that market no longer existed. And what we did at that time was we focused on industrial markets.
Since then, we have been a 100% industry-oriented company. And that was, let's say, the big change in the company's outlook.
Colette:
What makes Swissbit special? Why do you think you are so successful in the market?
Silvio:
Our products meet the highest industry standards, especially for sensitive data. We guarantee durability, robustness and in extreme conditions, such as telecommunications applications in the mountains or in extreme places or industrial environments. Our customer base includes some of the largest companies such as Siemens, Nokia and others. And they trust the high quality and reliability of Swissbit products and they are made in Europe, which I also think is very important today.
Colette:
…I find this concept of Made in Europe interesting… Are you one of the few companies… of your type that produce in Europe?
Silvio:
Yes absolutely. I mean, today we see cybersecurity as a problem, supply chains are disrupted. We have all these things going on with Russia, China, Taiwan right now. And I think being disengaged from those supply chains is a huge benefit today. But yes, we also have providers in these areas. I think the world is going to be connected in some way, but we can do a lot of things here. And especially when you have products that may contain cyber threats in the controls, in the software of the product, today it's important to have your supply chain under control. We can say that from the beginning to the end of the product we have no interaction or interruption by third parties and that makes us unique.
Colette:
And now perhaps we can talk about your association with Ardian. Why was it important for the company to sign this alliance? What was missing?
Silvio:
Yes, the main shareholder and founder wanted to sell the company at that time and the management team was looking for a strong partner to support us. What was really important was a good network with experience and also power to support our ambitions. Immediately after this transaction we acquired a company and at that time we had excellent support from the Ardian team. I couldn't mention doing this without your support. We had no experience in this area, so this was one of the great contributions to our association.
Colette:
Thanks Silvio. And Dirk Wittneben, you are the leader of the Ardian Expansion Team in Germany. Hello.
From:
Hi nice to meet you.
Colette:
I'm glad to meet you.
Colette
Can you tell me about Swissbit's transformation since joining Ardian?
From:
Shortly after our investment in 2020, the first major strategic additional acquisition was signed in December 2020. Silvio already mentioned that. Hyperstone, the German developer of industrially superior memory controllers and a longtime supplier to Swissbit, has been acquired by its shareholder. In fact, the acquisition of Hyperstone is a catalyst for Swissbit's development, adding significant microcontroller and software expertise and reducing time to market for new product development through integrated development processes. Meanwhile, the Hyperstone integration is complete, further strengthening Swissbit's control over the value chain and ensuring access to the highest quality microcontrollers given the current scarcity in the market.
Colette:
And... Yannick Metzger, you're head of the expansion team at Ardian. Hello.
Can we address some of the developments you've seen since partnering with Ardian?
Yannick:
I think the aforementioned acquisition of Hyperstone, which both Silvio and Dirk have already mentioned, is a good example of how we support the company at all stages of such a strategic project. We take some of the work away from management, but management is always the main driver of a project like this. This was the first development that I realized was visible to me. Management really pushed this acquisition. He had a clear strategic objective and we were the partner that helped implement that strategic vision. I think we've already seen that the Hyperstone acquisition has increased value creation and Swissbit's USPs now control more and more parts of the value chain and come up with promising ideas for new products. We are seeing a clear trend of faster time to market, increased internal transparency and operational excellence leading to strong growth and innovation despite the supply chain challenges we have seen in recent years. Personally, I and the rest of the Ardian team have been very impressed with management's performance during these challenging times and have been very pleased with performance to date.
Colette:
And how is the interaction in everyday life?
Yannick:
I think the interaction depends a lot on the status and urgency of ongoing projects. In addition to our regular exchanges on corporate strategy and our quarterly board meetings, we frequently discuss operational projects and improvement opportunities. We always try to take advantage of our best practices from other investments we care about and bring our knowledge and ease as industry advisers to the table. We have a very open and trusting relationship with Silvio and the team, which I would say is characterized by transparency and integrity. In practice, we talk almost every week, sometimes just a few minutes to catch up on pressing issues, sometimes longer to get to the bottom of complex problems and find the right path.
Colette:
... Did you face any challenges early on or were there areas that required more work or specialization?
Yannick:
I think the first challenge we encountered was during the acquisition process, which, as Silvio mentioned, was completely virtual until the last days of the process. So we all had to adjust to this new environment, do an M&A transaction, all from our desks at home, and finally get a chance to meet the people in charge in the final days of the process. So the first challenge we had to face was even before investing in Swissbit. After that, I think the first 12 to 18 months of our collaboration was also characterized by stressed supply chains. Getting enough supplies from our international supplier network has always been a challenge, which I think was handled very well by the gate management team. And it shows that experienced management teams are extremely important in highly technical business models.
Colette:
And Dirk, if we could go back to market development, what was your strategy? What do you expect from Swissbit for the future?
From:
Yeah, well, first of all, we expect a lot. Seriously though, we've seen Swissbit's core business of designing and manufacturing high-end memory for demanding applications perform very well in recent years. This segment was the backbone of our investment thesis. Now, we clearly plan to continue to grow this market-leading business with new and existing customers and expand our offering into the embedded IoT and microcontroller segment, where we see high growth potential going forward.
Colette:
And Silvio Muschter, how do you see the company in the near future and in the long term?
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My vision for the company is to expand the product portfolio, especially with mission-critical components, and deliver added value, especially in the area of security, cybersecurity, necessary for our clients to take their next steps of innovation. In this context, the focus on cybersecurity is one of the keys. I think it is everywhere and very present today, which is important for the future. This will allow us to further differentiate ourselves in the markets and, shall we say, integrate even more security features into our solutions. Thus, we see the greatest growth factor in the future in the expansion of the securities portfolio, with special focus on the integration of software and services. In addition, we strengthened our strategy by entering new market segments, such as the data center market. Here, Swissbit follows its market approach to combine high quality and product customization for these demanding applications.
Colette:
Thank you Silvio Muschter, Yannic Metzger and Dirk Wittneben.
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