Basemark is a software company specializing in augmented reality (AR) technology for the automotive industry. Headquartered in Helsinki, Finland, the company develops tools that empower car manufacturers to rapidly create various AR applications for in-vehicle use. We spoke to Tero Sarkkinen, founder and CEO of this innovative scaleup, member of the EIC Scaling Club’s Next-Gen Computing group.
Basemark's mission is to enhance road safety through AR. By overlaying digital information onto the real world, the company aims to keep drivers focused on the road. For instance, navigation directions can be projected directly onto the road, eliminating the need for drivers to look down at the dashboard. Additionally, the technology can identify potential hazards, such as oncoming motorcycles or pedestrians, and alert the driver accordingly.
Tero Sarkkinen has a 25-year history in the tech industry. The first company he led focused on processor and graphics performance testing, leading to a collaboration with Audi and Nvidia to develop futuristic digital cockpit concepts. This experience sparked his first self-founded venture, Rightware, which became a leading provider of automotive user interface software. After successfully exiting Rightware, Tero founded Basemark in 2015, building on his expertise in the automotive industry.
Today, the company faces competition from other technology firms in China and Korea. Additionally, major tier-one suppliers like Visteon and Harman possess some in-house AR development capabilities. However, Bosch is Basemark’s partner and already uses its tools for AR development.
Basemark differentiates itself by offering a comprehensive development toolkit that enables independent use by other companies and developers. This tool significantly boosts productivity, reducing the number of AR designers required from 10 or 20 to two or three. Development time is shortened dramatically, with the ability to create 100 iterations per day compared to just one every two weeks previously. This translates to substantial cost savings for clients. Tero explains:
“While many original equipment manufacturers (OEMs) develop AR in-house, they are not our competitors. They're actually potential customers for our AR development tools that enable their team to develop faster and more efficiently.”
It wasn’t straightforward for Basemark to find its place on the market. Tero and his very talented developer team initially explored the virtual reality market. Leveraging their PC graphics expertise, they developed VR performance testing software. However, the VR market's rapid decline prompted a pivot.
Recognizing their strengths in graphics and existing automotive connections, the company shifted focus to computer-aided driving. By combining computer vision and graphics rendering capabilities, Basemark identified an opportunity in AR technology in 2022.
Basemark hasn’t been immune to global turbulences, like the Covid pandemic. The shift to remote work hindered the company's B2B sales efforts, leading to a dramatic slowdown in new business acquisition. While the company managed to retain existing clients and projects, revenue was cut in half, dropping from 8 million to 4 million in a single year.
When the company had finally found its product-market fit and started to raise funding, Russia’s war in Ukraine broke out. Tero shares how this impacted the company’s fundraising efforts:
“Securing the 22 million euro round, consisting of 17 million in equity, was the most difficult fundraising process of my career. I've raised well over 50 million throughout my career in funding, and this surpassed all the challenges I’ve ever faced in previous rounds.”
As of today, Basemark has secured approximately 35 million euros in funding through a combination of equity, R&D loans, and grants. “We were very happy and lucky to receive an EIC grant worth 2.5 million, which was super critical for us at that time,” Tero adds.
Basemark has secured significant software licensing deals. While the company has been providing software development services to BMW since 2018, it has recently closed two major production deals for its own software license. One of these deals is valued in the tens of millions and will result in the company's AR software being installed in millions of cars.
Today, Basemark has over 100 employees and keeps on growing. The company is on the brink of profitability and is projected to break even this year and achieve full-year profitability in the following year. Tero shares his joy for reaching this milestone:
“This is an incredible moment in every entrepreneur’s life. It's the culmination of years of hard work, and it feels amazing to be so close to achieving our goal.”
Basemark’s EIC Scaling Club membership is another stepping stone for further success. Tero shares the company’s progress within the Club: “We've started workshops and assembled a mentor team composed of experienced investors and entrepreneurs with strong backgrounds in semiconductors, software, and other areas. Our focus is on scaling strategies to overcome growth challenges and attract the next level of investors.”
EIC Scaling Club is also helping Basemark identify its focus for geographic expansion and product diversification beyond the automotive industry. Tero points out:
“Mentor insights are providing an additional layer of strategic guidance, acting as another set of board members. Additionally, we've sent our rising stars – middle management representatives – to the EIC Summer School, where they've gained valuable experience and development opportunities.”
The EIC Scaling Club is a curated community where 120+ European deep tech scale-ups with the potential to build world-class businesses and solve major global challenges come together with investors, corporate innovators and other industry stakeholders to spur growth.
The top 120+ European deep tech companies will be carefully selected from a pool of high-growth scale-ups that have benefitted from EIC financial schemes, other European and national innovation programmes, and beyond.
The EIC Scaling Club is an EIC-funded initiative run in partnership by Tech Tour, Bpifrance (EuroQuity), Hello Tomorrow, Tech.eu (Webrazzi), EurA and IESE Business School.
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