Suranga pictured above centre, between Magic Pony Technology CoFounders Dr. Zehan Wang (L) and Rob Bishop (R). MPT spent their first six months in our co-working space at Balderton HQ... a lot has changed since then!
I'm happy to share the news that our portfolio company, Magic Pony Technology has just been acquired by Twitter . It is always good news when an iconic company acquires a great technology and team, but this happens to be particularly special for me, as it is my first exit as a venture capitalist. I joined Balderton in 2014 and invested in Rob and Zehan, the founders of Magic Pony, in 2015.
The speed at which the company has reached this point underlines the remarkable success that Magic Pony has become. An average successful Series A investment takes eight years from investment to fruition: this all happened in less than 12 months.
It's easy to assume that investors are happy to sell an investment to any acquirer. In reality, and especially in the case of game-changing companies such as Magic Pony, nothing could be further from the truth. Twitter is one of the most powerful and influential communication platforms in the world and is well-poised to become the primary video platform thanks to strategic investments in products such as Periscope and content relationships such as the recently announced streaming partnership with the NFL. Meanwhile, Magic Pony's technology applies the very latest in deep learning to video content, and will therefore provide a booster to an already impressive rocket.
Twitter has a hard-won reputation at being an excellent acquirer. If you look at Twitter's previous acquisitions, it is clear that they identify and attain companies by virtue of their technological acumen, or proven access to a relevant audience. This is testament to how thoughtfully they consider when to buy, how to buy, and how to integrate.[3]
Looking back, deciding to invest was easy. The founders had three key ingredients as a team: a consistent, strong vision of how they could build a very large company, the real-world experience to build an actual business; and significant technological depth that came from being experts in their fields. I also felt confident that we could help the company. Most likely large customers were based in the Bay Area (where I spent over a decade) and Rob and Zehan's primary focus was on developing technologies for video processing and, as the Founder and CEO of a video company for eight years, I immediately could see the impact that their technology could have.
Artificial intelligence, machine learning and deep learning are terms that are thrown around a lot in VC world right now. It is not hyperbole to say that at least one pitch a week that I see claims some core technology in this area these days. Magic Pony stood out from the very beginning. First there was the technical strength of the founders. Zehan is a first class PhD computer scientist from Imperial who worked on developing novel visual information processing techniques as part of his PhD; while Rob has a first class Masters in Electronic Engineering from Imperial and has a strong background in GPU programming. Beyond that, the guys have also always shown keen commercial nous. Both had founded companies before, and Rob was the first employee at Raspberry Pi, which gave him first-hand experience on how a fast growing start-up gets built.
The company they founded demonstrates this unique combination of talents. Magic Pony achieved the incredibly difficult balance of developing a technology that is truly ground-breaking, but that also has hugely valuable real-world applications. Particularly in the AI field, this is unique.
It takes more than founders to build a great company and I don’t think Rob and Zehan would mind me mentioning that two other powerful positive forces. One is Entrepreneur First - the most mould-breaking accelerator in the world since Y-Combinator; and the second being that their founding Chairman was the incomparably brilliant Chris Mairs, a good friend who knows a thing or two about balancing tech smarts with commercial acumen as the founding CTO of Metaswitch, the low-profile UK tech powerhouse funded by Sequoia. On my end, a third driving factor was Ferenc Huzsar – at the time of the investment the in-house data wizard at Balderton who was so excited by what the company was up to that he left us to join them a few months later.
Exits are bittersweet moments. I will miss working with the smart, inspiring team massively. Lacking an office when they first started, Magic Pony was based in our office for their first six months and I believe I'm right in saying every board meeting the company ever had was in our office. We often have teams hangout in our basement from time to time, but Magic Pony holds the record. Although, since they left, we have saved big money on pizza so it isn't all bad news!
On the sweet side, however, everyone at Balderton is obviously excited for the team and what comes next and we are in business, after all, to return capital to our own investors. We look forward to what they build with the huge, new platform Twitter will give them.
