After his trip down to CES, we chatted with Inventure’s Timo Tirkkonen. He knows the company story well, serving as the longtime Chairman after we led the $2.7 million Series A back in 2015.
We wanted to hear the inside story and see how the ride has changed him as an investor. Here’s our chat:
How did we build conviction in aiMotive back in the day?
Timo Tirkkonen, Partner at Inventure: It was really the founders’ vision that we invested in eight years ago. Laszlo [Kishonti, founder and CEO of aiMotive] had a great experience as an entrepreneur building Kishonti, which was benchmarking CPUs and graphics cards. But he had the vision — which was very true — that cars would become much more about software than mechanics. Software will guide the car.
I just had the same experience with Rightware, in which we invested in 2009– they disrupted the dashboard from analog to digital. So we already saw some of that transformation in the car industry. It was easy to adapt that experience and build conviction for autonomous driving.
We’re a Nordic and Baltic investor. How did we get involved with a Hungarian autonomous driving startup?
The common denominator was Ilkka Kivimäki’s good friend, Ville Miettinen, who knew Laszlo from his graphics background. They were hanging out together with Paul Bragiel and that whole crowd, so there’s really a deeper connection to Finland than might appear from the outside.
Ok! So there’s almost a demo-scene connection here.
Well, Laszlo’s background in the graphics world was key. You might think of analyzing video as a computer interpreting something live-streamed, but video consists of frames per second. If your feed is 70–90 frames per second, you’re not analyzing a feed. You’re analyzing 70–90 pictures per second. How many milliseconds do you have for each frame, then? How do you build a system that can support that?
Their background in graphics at Kishonti allowed aiMotive to do that. When we invested, they were maybe 12 ex-Kishonti employees. We could speed everything up because they were geniuses in graphics.
What became incredibly important was that we built our own simulation tool. aiMotive built up cities, graphics-wise, allowing them to change rain, color, and simulate “close by” accidents or even children running into streets. You could do a lot of development without driving a real car, which sped up the development process. We kept that to ourselves for a long time, but then it became so good that we even sold it to competitors and OEMs.
We were the first ones who had software in the loop, then hardware in the loop, and then we also made an accelerator. Meanwhile Tesla was also building an accelerator, so when Elon Musk confirmed it four years ago, without knowing it, we had the exact same strategy as Tesla.
Was that the moment you knew aiMotive was on the right path and was going to be big?
Well, actually, in 2018, the automotive market was starting to catch on that this Level V “total autonomous” driving hype was gone, and Tesla was not getting to that level. Many of our competitors only thought about Level V back then, and their autonomous driving architecture only supported full self-driving. They didn’t think about the different steps, the Level II, III, and IV, right?
We had such a modular architecture that we could actually slice and dice aiMotive into different modules that we could sell here and there. It was Level V compatible, but it wasn’t Level V.
I guess when all the competitors all of a sudden were burning out, we said, “Hey, we have the pieces here. We can still compete. We’re not shutting down the company because we didn’t put all our eggs in one basket.” That was maybe one moment.
Maybe I’ve read too many TechCrunch headlines, but I picture self-driving technology coming out of San Francisco. How did a company in Budapest compete with their huge American and Chinese counterparts?
Well, actually, Hungary and the Budapest area are much more automotive than Silicon Valley. The truth is, Silicon Valley really doesn’t have a single big brand doing anything there. They may have R&D and software departments paying huge salaries to so-called “top talent”, but I still think that the biggest top talents are going to the real tech companies, not to the auto sector.
But all of the big manufacturers are in Hungary. Bosch has huge R&D centers in Hungary, all the German manufacturers have assemblies there, and now they’re starting to pick up on having more automotive R&D centers in Budapest. You’re very close to the automotive sector there.
Being based in Budapest, we quickly lifted the company to over 200 people with a third or a fourth of the salary of Silicon Valley. Being based in Budapest, there’s the cost efficiency, and then there’s a massive pride of the employees to be part of a true Hungarian success story.
This big exit has also really boosted the whole startup ecosystem. Foreign investors can see that big success stories and exits can come from Hungary!
From very early on, you’ve been Chairman of aiMotive, and you’re the Chairman of 4 other companies. How do you look at your role there?
First of all, you have the authority from the other board members to have a very close dialogue with the founders and the CEO. Two to four times a week, we’ll have long calls. That allows you really contribute your experience and have a very open dialogue, and provide an emotional backstop for the founders and support them in their professional and personal life.
But as Chairman, you must always remember that you represent all the shareholders, even the option holders. So you have to stay independent, and that’s probably why I’ve been elected Chairman so many times because I’ve learned how to navigate in this role. It’s always easy when everything goes fine, but there always come tough times. And then, you have to act as the moderator between the shareholders, the board and the founders, and the management group. And then you just have to be there very diplomatic and find common ground.
But you can always contribute so much more to the company compared to a regular board member. Like recently in the exit process: you have a mandate from the company to really drive it through together with the management team.
How will your experience with aiMotive change how you evaluate new seed cases going forward?
It is really about the vision, passion, and dedication. You can always see that. In fact, I don’t remember if Laszlo even had slides the very first time he came to present to us. But you can see in five minutes when somebody comes in to pitch a huge opportunity- does this come from the heart? Or do they just want to try to get rich? Because if you have the passion, the riches will come along.
I think that’s a great way to finish it, but any last words?
I really want to emphasize that the vision isn’t just important for pitching a VC. Its also about recruiting a skillful team that believes in what you’re building. Along the way aiMotive really hit some brick walls, but that vision is important to drive you forward, through good times and bad.
Laszlo proved to be a fantastic entrepreneur until the end, and he did so by defending the big vision and not sacrificing that focus for a revenue play along the way. This was always a big vision play!
