Meet COMPREDICT, the Startup Where Blackberry and Michelin Invested

ABOUT THIS EPISODE

Executive Summary

COMPREDICT is a Darmstadt, Germany-based deep tech startup, offering virtual sensors for cars. They already convinced Michelin and Blackberry to invest, so we thought it would be about time to catch up with the team around Rafael.

Virtual sensors in a car take data from physical sensors and fuse them to generate additional measurements. Rafael Fietzek, MD and Co-Founder COMPREDICT 

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This show was made possible by Hessen Trade and Invest with their brand Invest-in-Hessen. You can learn more about them here (https://www.invest-in-hessen.com/). We also run a dedicated sub-podcast with all interviews and news in cooperation with them. Find it all here: https://techstartups.sounder.fm/

A normal car has four physical wheel speed sensors to measure each wheel. With us, you need only two physical sensors and save money.Rafael Fietzek, MD and Co-Founder COMPREDICT 

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Blog Post with Links and Show Notes

Find it here: https://medium.com/@startuprad_io/meet-compredict-the-startup-where-blackberry-and-michelin-invested-15b6f4aa6c70 

Welcome to start bread dot IO, your podcast and Youtube blog covering the German startup scene with News, interviews and live efits. Hello and welcome everybody. This is Joe from startup break dot all, your startup podcast and Youtube blog from the German speaking area, Germany, Austrians, win Zerland, as well as the founder of the words kick entrepreneurship radio called Startup Dot radio. Today we have another interview in our series with investing Hessn, of course, sponsored by investing Hessan, and I would like to welcome aguest back again. Hey, Raphael, hi, you did hi, Joe. Yeah, I'm fine. All good. That is great. Actually, we we just talked before the recording. You have been in our interview and we pop Lishal the interview of court. We will link it down here in the show notes. Um In August, middle of August twenty nineteen, so it was almost exactly three years ago and you guys are guilt still going strong. Congratulations for that. And today we are talking because you guys announced earlier this year that you raised a five point five million series a funding. But before we get into that, let us first talk a little bit about you and con predict and everybody who's watching this on Youtube? He sees behind you the two cars with the COM predict logo and writings on it. So they can already guess you're somehow related to cars, right. Yes, that's true. So we specialize on virtual sensors for cars. Virtual sensors. Is it something you're only attempt to plug in or how does it work? Yeah, so, so I can explain. So. So, of course everybody knows what hardware sensor is.

So hardware sensor measures a physical quantity. In vehicles there are many, many hardware sensors which measure different physical quantities, like the wheel speeds or accelerations or temperatures or other physical quantities. A virtual sensor takes the values from the hardware sensors and Um fuse, fuse them together to generate additional physical quantities and it can act. For instance, it can measure the forces between the THIG and the road. This is a virtual sensor we have. We have another virtual sensor which can measure the current vehicle mass or temperatures in the battery pack of of certain cells. We have virtual sensors for that. So so there are many, many different use cases for our virtual sensors. I'm not a technical guy and don't have a PhD in engineering like you do, but for me it sounds like it's an additional calculation and analytics layer on top of the physical sensors. Would that be appropriate? Yes, that's that's true. That's that sums it up pretty pretty well. Yeah, that sounds really, really fancy. And actually, what can you do with that? So yeah, as as I said, you can enhance the data which is available in the car, so you can calculate additional values like forces between tire and the road or temperatures and in the battery pack or something like that. Or you can even replace existing hardware sensors. So a simple example would be every car on the market right now has four sensors to measure the wheel speeds. So so they measure the wheel speed of each individual wheel. Do you need four? Without virtual sensors, you can maybe replace two hardware sensors and and save money at the end of the day. M Hm, I see. Um. And...

...when we've talked like years ago, really years ago, I remember that you also did some work for development of new cars so that you can virtually test part. Is that still what are you going for? Yes, that's that's still a part of our whole software solutions. So, Um, this is rather a small market, but also a market we provide a solution for. So you have to imagine automotive companies. They have a lot of development cars and they put a lot of additional sensors to measure forces, Torques, temperatures of which act on components and damage them. They they put a lot of additional hardware, sensors in the in the vehicles, and these sensors are very expensive. So they just can Um uh. I have a few vehicles these additional sensors and with our virtual sensors it's possible to have a whole fleet of development vehicles where they can measure these important values. So this is also a solution we provide for development cars and they use the data to then design the components and Um, for instance, if they are overdesigned, make them lighter, if they're underdesigned, make them stronger so that they don't fail when when the cars delivered to the customers. It sounds very much like you're very early in the life span of a new car model, meaning in the development. Are you really put into the serial production of cars? Yes, so, so, for for us, the development and the production of vehicles are very much connected. So during the development phase, uh, there is a lot of interesting data for us to to train our virtual sensors. So so we use a lot of data from the developer mad phase of the vehicles to train...

...our virtual sensors and then we can easily deploy our virtual sensors into series production cars. Um, this has also to do with our new investor, blackberry. Maybe maybe I can talk about that a little bit. So in our recent funding ground, which was around two months ago, we have two new investors for once, a financial investor, a VC vector partners, and a strategic investor, which is blackberry. I guess everybody knows blackberry from the smartphones which they used to produce ten years ten years ago, or even even longer ago. Um, they don't do it anymore. Um. What they do now is they have q and x, which is a real time operating system which runs in vehicles, and they also have the Ivy Platform, which is a platform of vehicle data where you can easily access vehicle data in the cloud and it's also easy to to embed Um software modules into vehicles. And this is what we do for the virtual sensors. So once we have trained our virtual sensors with the development vehicles, for instance, we can easily, through the Ivy Platform, deploy them into a lot of series production vehicles which can run blackberry q nex but can also run other operating systems like automotive great Linux. M You've been already going into the most recent investment round, but since we talked you actually did an extension off scene round and the series. Hey, I'm can you talk a little bit about that before we dive a little bit into how it was during the current market conditions, to go out and do some fundraising? Yes, of course. So, uh, we we,...

I would say we, Um, the combination of of luck, luck and skill, of course. So, so we closed our extension of of the seat round in March, so when covid hit and everything. So so the market conditions at this time in March we're challenging as well. So so it speaks quite well about us that we were able to close that extension of of the seat round. Um, Michelin was our lead investors. So the tire manufacturer Michelin, was our lead investor there. UH, yeah, we of course work together on on tire topics. With with them. Yeah, and this helped us to to Um manage the covid crysis because, as you can imagine, everybody was was scared and was rather tough for us. So so we we, we couldn't grow, but in one we again grew strongly, which brought us into into the position to raise our serious a right now. Yeah, and yeah, the market conditions are tougher than they were mid of one. Of course, everybody, everybody knows knows that. But we, I think we have a strong product, we have a strong traction with our customers. That's why we were able to to raise our serious A. here's a usually means here, past one million. You asked all as any recurring revenue. Um, I was wondering. D C an impact in term...

...of the valuation you've gotten or the money you've gotten, that may have been ten higher before the current downturn of the private market. Yeah, maybe it's it's hard to to speculate about that, I would say, because you cannot cannot do it like like an a B testing. Yes, so, Um, yeah, it's it's hard. It's hard to the engine you're speaking. You cannot do an a B testing here. Yeah, so, so, but yeah, we, we. We're happy with our financing around. We're very happy with our new investors, um as. As I said, blackberry with the Ivy Platform, really can help us to bring our virtual sensors with one mouse click to a lot of vehicles. So so this is this is basically the idea. Can Add another virtual sensor to a vehicle with one mouse click. I see, I see, I see. And for everybody WHO's listening out there or watching this, Um, do you have a few chips for fundraising? Right now, in the downturn of twenty twenty two, I mean summer is usually not that busy in terms of Um making pictures, but fall and winter are. I'm sure there will be a lot of people going out there pitching a lot of investors, and they will always hear it's not as good as it used to be. Do you have some tips how to approach it? Just pitch more investors, be more focused on your KPI s and your profitability. What would be your recommendation? Um, sure, yeah, I mean you have to to keep in mind that under these market conditions it will take longer than you expect to close the financing. Wrong. So in this case, cash management is key because because you have to plan some some extra months before the cash runs out. So so you you'll be able...

...to negotiate correctly with the investors and and get a good deal. So so, yeah, looking at cash, managing the burn rate. I guess this is this is the main uh tip from from my side. M H, I see C C um. Usually we have a few more questions. One of them would be you guys are now pretty well funded. Um, first question is how long do you expect, under the current condition, your funding should last? So we always plan with with that. The funding lasts around two years. So so in this year and in the in the next year we want to grow strongly, develop our product take the next steps there. And Yeah, we always plan that the funding should should last at least two years and then, depending on the on the current market conditions, we manage our our cash burn so that we can comfortably negotiate with with investors and and talk to investors. And of course, the second usual question is you just fantraised. I currently hiring? Yes, of course, yea. So, Um, we are around thirty people right now. We will hire at least five to ten more people till the end of the year. So, yeah, we want we want to grow our team strongly. We have a lot of open positions. To check our linkedin out, to check out our homepage. There are a lot of open positions and we um looking for strong team members. Down here in the show notes your website, we can find the career page. Um, one more question, because we can do have a very international audience. In the first half of two been hurt in one over...

...one hundred countries. And we also be open to completely remote jobs? Yes, UM, completely remote. Of course, in Germany this is no problem. Everybody knows that. There is also some implications regarding tax laws, you have to be aware of. Yeah, but we, for instance, have an employee who works out of Paris. So so you, is is, of course, a little bit easier. And after that we we have to we have to see. Yeah, but but in Germany is is no problem. You. Yeah, we have to talk about it and all the rest of the of the world. Yeah, we have to see. I see CE CE UM. So what do you planned besides Um, hiring people conquered the world? Yeah, of course. I mean if you startup, onso wants to want so basically conquer the world with their product. Maybe maybe maybe a good measure to too too, and a good goal for us is blackberry q next runs right now in more than two hundred million vehicles and our goal for the next couple of years is to have virtual sensors in a in a major part of the two hundred million million vehicles and also also, yeah, with vehicles who don't run Q next run some other operating system have have virtual sensors there. Yeah, I see, so somewhere around two hundred million cars. Are you going? Okay, I'm expressed for that. And of course we've been talking. Your money will last two years. Opportunistically you may go out. Are you currently open to talk to additional investors, to new investors? Yes, so, so um off of the financing round is before the...

...financing round. So we UM. Maybe what what we did did slightly wrong the last time is is yeah, we basically after after our financing around in March, we didn't talk to two investors, still late, one which was it wasn't mistaken in hindsight. So of course we were open, open to talk to two investors even right now, shortly after our financing round. Another very good repeating recommendation. Always talk to investors. Stay in touch with them. Don't let the conversation die down, because you will credit when you next time in fundraising mode. Um, of course, the last question, because this is here about Frankfort and the right mind area. How good did it do for you? What was important here? Um, actually as a location for you guys as a start. Yes, so, so there we are, located in damps which is around thirty kilometers south of Frankfort. The technically university in Dampstad really supports founders and which is which is really, really great for for us. We are we we received much needed support from from them in the in the beginning. Um. Also it's great for us. We hired a lot of people directly out of the T damstad. So so we have done some some master thesis and then then hired people who have wrote that master thesis. And Ryan my area is great for us, especially were international startup. We have customers all over the world. If you want to travel, there's basically no better place in Germany than Frankfort. I'm getting a little bit to last question here. Um. This is hurt and seen across the...

...government here in the state and city and so on, and would there be something you would like to address to those political decision makers right now. That is Um, as we say in Germany, burning under your fingernails. Some questions, some request you would have for them? That's a good question. Yeah, that's why we are asking. Yeah, this is I have to think, to think about it. Yeah, of course, I can always be more support. And there also regulation regarding virtual stock option programs for employees. I guess this is still too complicated. Um. Yeah, so, so this, this, this is like there's a big topic which should be addressed and and made easier, because for a startup which grows strongly, it's is this really strategically important to Um Health? Employees Participate in the success, and right now this is kind of hard regarding all the regulations that exist. I see, see, Um Raphael. Thank you very much, with a pleasure. This time it was a little bit shorter, but it was more or less an update on the other interview, and if you throw both of them together, I do believe you get an interview of something like close to an hour, which should be more than sufficient to learn about com predict and you, guys, Um Congret relations to your fund praising again and hopefully hear your back in two years when we talk about your series, be fundraising. Yeah, it would be great. Yeah, it was a pleasure talking to your job. Thank you for to invest in Hassan for sponsoring this interview. Um, be back pretty soon within another interview. Thank you, guys Byeye. Thank you. Bye. Bye. HMM. That's all. The folks...

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