Clearing Air With AR
Bullard sees the future of its business more clearly, thanks to augmented reality technology developed in Switzerland.
“Four years ago, we started with a simple mission to help firefighters save lives by allowing them to see through smoke.” — Martijn Bosch, Chief Executive Officer of DariX
Big, strategic moves such as the Facebook’s acquisition of Oculus or Apple’s string of smaller acquisitions starting in the mid-2010’s garner all the attention and saturate tech news. But they are just the tip of an M&A iceberg in augmented reality, virtual reality and wearables.
In fact consolidation and acquisitions of augmented reality and wearables startups have picked up over the last few years. While many of the acquirers’ names are to be expected, like Google (Eyefluence in 2017), Intel (Recon in 2015) Baidu (XPerception in 2017), Adobe (Uru in 2018), Microsoft (AltspaceVR in 2017) and Alibaba (Infinity Augmented Reality in 2019), others are less obvious.
Last year, L’Oreal, worldwide leader in beauty consumer products, acquired Canadian AR virtual makeup try-on company ModiFace. Lyft, the ride-sharing company, acquired London-based AR startup Blue Vision Labs, whose technology uses commodity hardware to overlay interactive AR on mapping data. In 2017, Valeo, one of the leading global automotive suppliers, acquired Gestigon, a German startup specializing in 3D imaging and HMI software.
L’Oreal, Lyft and Valeo are large companies with expansive R&D and innovation portfolios. Today, we want to focus instead on a much smaller, but strategically significant, acquisition. Digital M&A is not just the domain of large corporations.
In April 2019, Bullard, a Kentucky-based maker of professional protective equipment for industrial workers and firefighters, announced that it had acquired DariX, a virtually unknown AR startup based in Lausanne, Switzerland.
Is Bullard preparing for a new shift to digital in the safety equipment industry?
Who is Bullard?
Bullard is a leading manufacturer of protective equipment for the industrial, fire service and law enforcement markets: thermal imaging devices, hard hats, firefighter helmets and respirators. Privately-held and family-owned, Bullard is a manufacturing company with a strong position in a nice market, with global distribution and estimated revenues of approximately $80 million.
A pioneer in the world of personal protective equipment, Bullard has a long history of niche innovation and success since its founding in 1898. In its early stages, Bullard manufactured lamps and mining equipment to gold miners, and eventually began making protective headgear, effectively inventing the “hard hat”. In the ensuing decades, the company introduced several innovations in materials and design, such as fiberglass hats in the 1940’s, thermoplastic materials in the 1960’s and ratchet suspensions in the 1980’s.
It took exactly 100 years from its founding before Bullard strayed from its core hard hat and respirator businesses and introduced an entirely new product line. In 1998, Bullard brought to market the TI, its first thermal imaging camera (TIC), to provide firefighters with a way to detect high heat zones in low visibility conditions — a technology that, up to that point, had only been available to the military.
Who is DariX?
Formally established in 2017, DariX is a university spin-off born out of research conducted at the EPFL School of Computer and Communication Sciences.
For context, EPFL is arguably one of the top engineering schools in Europe. It has also committed substantial resources to developing, supporting and commercializing market-ready applications of the technology it develops. Since 2000, EPFL has launched more than 270 startups and currently houses more than 170 companies in its EPFL Innovation Park.
Darix focuses on developing smart-glass augmented reality technology for industrial, commercial and emergency responder safety applications.
The company was started by AR researcher Martijn Bosch at the EPFL Image and Visual Representation Lab, led by Professor Sabine Süsstrunk, and took $130,000 in seed funding from Venture Kick, a consortium of Swiss companies and foundations that, over the last 10 years, has provided pre-seed funding for 600 startups, mostly spin-offs of Swiss universities.
Bullard + DariX
In 2017, Qwake Technologies, a tiny San Francisco startup, made a big media splash when it introduced C-Thru, an AR software platform that could transform any self-contained breathing apparatus (SCBA), like the ones routinely used by firefighters across the world, in an AR headset. C-Thru uses an infrared thermal imaging camera and AR projection to deliver augmented imagery directly onto the firefighter visor, eliminating the need for handheld TICs.
Just like Qwake and DariX, a host of startups are poised to introduce AR technology in a whole range of industrial, safety, handling, training and logistics applications, developing solutions that represents a potentially disruptive force in markets where traditional industrial incumbent have enjoyed long-standing leadership. Companies just like Bullard.
It is not hard to imagine that ultimately Bullard’s leadership team realized they needed to enter the fray and equip the company with AR technology and competencies. On April 4th, 2019, Bullard announced its acquisition of DariX.
How Will the Acquisition be Used?
In the acquisition announcement press release, Martijn Bosch said, “Four years ago, we started with a simple mission to help firefighters save lives by allowing them to see through smoke. Today this dream has come a big step closer as we are joining a fantastic and like-minded team.”
Bullard has yet to disclose their plans for the acquisition. Peter Lugo, President and Chief Operating Officer of Bullard, has stated that they will be creating “new product solutions to continue to solve our customers’ most critical safety-related challenges.”
If Bullard has determined that it must develop its own line of AR products or even an AR platform for safety applications, then DariX represents a key “digital” asset for Bullard. An indication that this might be Bullard’s strategy, is that DariX will become the “Bullard Technology Center” and will continue to be based in Lausanne, near EPFL.
This would represent the third major transition in Bullard’s 120-year history, after the hard hat invention and the thermal imager development.
Why it Matters
- This is the quintessential digital M&A deal. An established, physical-product industrial company with a traditional supply chain and distribution model acquiring a pre-revenue digital startup, with the aim of developing and commercializing its technology.
- Bullard is a relatively small, traditional, private industrial company operating in niche markets with no significant M&A history. Digital M&A is not just for large, public corporations.
- Bullard went across the ocean to find the right AR technology partner. The best digital M&A opportunities may not be available in a company’s backyard.
- The investment by Bullard signals that AR technology has real applications in the safety market and in industrial applications is general.
- There might as well never be the proverbial “killer app” in AR that drives mass market adoption. Large tech companies and a bunch of consumer startups alike have so far failed to identify it. It might instead be the case that AR technology will be best suited for niche industrial applications that materially improve safety, efficiency and productivity of workers on a plant floor or in the field.
What’s Next
The development of AR, VR and wearable technology in B2B applications will lead to a crescendo of M&A activity in the space. Expect AR and VR startups to be targeted by companies in a variety of industries beyond media and software, such as aerospace, automotive, healthcare, energy, utilities, mining, oil & gas, manufacturing and logistics. Most deals will be relatively small in size and early in the target’s development stage.
TL;DR
- Bullard makes hard hats, respirators and infrared imagers for firefighters.
- DariX, a Swiss university spin-off, develops AR technology to help firefighters “see through smoke.”
- Bullard acquired DariX on April 4th, 2019 for an undisclosed amount.
Darix will become the Bullard Technology Center… - … Likely jumpstarting development of a new line of AR-enabled Bullard products and solutions.
- Digital M&A is not just for megacorporations. Bullard is relatively small, family-owned manufacturing company.
- Applications for industry, safety and in-the-field work are likely to lead market adoption of AR technology.
More of this? Subscribe to “The Earnout”. Digital M&A in your inbox, once a month. Brought to you by FireMatter. To learn more, click here.
