Desktop as a service

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Pitch

Cloudalize empowers its customers with GPU (graphics processing unit) power on demand so they can run GPU-accelerated applications on any device. Cloudalize’s platform enables on the one hand architecture, engineering and construction companies who struggle to collaborate remotely, securely and efficiently. On the other hand, the platform also enables software vendors, content creators and even entertainment providers to distribute their GPU-accelerated applications and 3D models instantly via a one-click experience on any device. In this way, we provide powerful, instant and hassle-free experiences to any user regardless of purpose, device or location.

Facts & Figures

Founded by Benny Willen and Jeffrey Meesemaecker in November 2011, the Cloudalize team is composed of 28 engineers and experts and is still expanding rapidly. The company has offices in Gent, Amsterdam, London, Iasi (Romania), New York and San Francisco. In August we raised €5 million in Series A funding led by the Hong Kong-based investor Horizons Ventures. The funding round was supported by the EIT Digital Accelerator. Previously we had already raised €4.5 million in capital.

In Belgium prospects often ask us why they should move to the cloud, whereas in the US, the UK and The Netherlands we never get this question: the cloud is just obvious.

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The hard thing

The 2 founders, Jeffrey and Benny, have always had a strong relationship, going back to when we were 18-year old students. We weren’t an official company then, but yet we were already building technology together. We actually started working in 2010, but the company was only founded a year later: we didn’t have the financial resources to continue on our own. In the following years, we have been working 24/7 for a long time. This caused quite some distress in the family, but we managed to pull through.

Our vision in 2010 was that virtual desktop infrastructure would evolve towards an Office365-like platform where we wanted to focus on delivering GPU power. Despite one’s location, time, device or purpose, human capabilities need to be seamlessly augmented by smart technology. Whether it is virtual reality, augmented reality, graphics or artificial intelligence, they all need GPU power. But GPU chips consume a lot more electricity compared to CPU chips and hence they present a cooling challenge and a battery powering challenge.

Let’s use the GPU power from the cloud and stream the pixels to any screen, we said. Our mission is to deliver that power instantly and seamlessly without users having to worry about or to hassle with hardware or IT-infrastructures issues - quite a revolutionary idea 7 years ago. We invested about 5 million euros in R&D. In Belgium there is such a lot of creativity and there are so many great inventors in IT but there is still not enough funding in this R&D stage. That is quite a missed opportunity for Belgium.

We realized more than 400 different proofs of concept with various customers before we felt ready to start production. Our system is actually full-stack: we designed and built both the agnostic hardware layer and all the 17 on-top software layers ourselves. We received public acknowledgement of Nvidia who called Cloudalize the epitome in delivering GPU power from the cloud. This was of course a decisive argument for a top investor like Horizons Ventures.

Marathon

We waited too long to get a professional recruiter on board, not for the recruiting but because we didn’t make enough time to invest in our company culture. Our HR expert also brings all the necessary soft skills into the company, like a 360° feedback evaluation process, the concept of a buddy, personal growth plans, up-to-date overviews of everyone’s responsibilities and competences, team building events. In terms of the human organization, we now have an experienced management team and are ready to scale.

It is a marathon though, a long-time effort. It is extremely important to have everybody aligned on the shared company vision and engagement. Our company is so cutting-edge that it still takes a lot of time to train everyone adequately. At Cloudalize you need a strong technical basis but all the rest you learn on the job – a steep learning curve.

We are currently looking for advanced and senior technical experts with working experience. Not all the full stack expertise can only be found in Silicon Valley however. As a young startup, it is a matter of finding those rare birds in smaller local crowds. Another advantage of operating from Belgium is that we can offer a very advantageous stock option plan. In this respect Belgium is one of the best countries in the world and far better than Silicon Valley. This is a strong competitive weapon in the war for talent.

Zero risk

Recently we raised a €5 million Series A-funding led by the Hong Kong-based investor Horizons Ventures. Cloudalize previously had already raised €5 million in capital mainly from local investors. However, the smaller amounts of money we needed in the years before were a lot more difficult to collect than the larger numbers. We started by asking all my friends and family to invest via the win-win loan, a fiscally advantageous format created by the Flemish government.

We guaranteed a zero risk investment by adding a written clause stating that the two founders would personally pay back the rest of the money in case of failure. Even though we knew those people for a very long time, they were still very hard to convince. That’s the typical Belgian mentality. Belgians rather keep their money on their savings account than investing it in an entrepreneur. Early investment prospects claimed that ‘they weren’t an investor’, their accountant didn’t recommend it, their partner didn’t support it, that it simply feels too strange, too unknown and that they feared it would put our relationship at risk in case of failure. But I do believe we can change this mentality. With all the money on our savings accounts, there is no reason why Belgium wouldn’t be able to become an investment powerhouse for entrepreneurs with great plans and great teams.

Our first business angel was someone who knew and trusted Jeffrey’s technical brilliancy as he had worked with him in the past. Still negotiations were long and difficult. When it became clear that the first investment round was successful, people started gaining more trust and interest, and many followed our first business angel. Next we raised 20 times 5,000 euros via crowdfunding with the help of local investment guru Jacky De Donder from investment magazine Beursbubbels. Jacky helped us without ever asking anything in return. Thank God there are still people like Jacky in Belgium.

Investor relations

We have always given a very honest and transparent 3-monthly update to our shareholders. This way you build a relationship with your investors to turn them into your early ambassadors. Also, the more the trust grows, the more they are likely to endorse you to other potential investors. From that moment onwards we were introduced to ever larger tickets investors.

In 2018 Cloudalize appeared on Horizons Ventures’ radar. They are one of the world’s leading top investors and they invest first and foremost in the entrepreneurs themselves who have usually build a deep tech solution that can deliver on a specific vision within their domains of interest. Before Cloudalize they had already invested in big brands like Siri, Waze, Facebook and Spotify. Thanks to Horizons Ventures we are now starting to play in another league and have become part of a much larger international family.

Virtual real estate

Cloudalize delivers GPU-on-demand to any device by streaming in the pixels from the cloud. GPU power lies at the basis of high-end graphical experiences. Our world evolves to ever better looking graphics, interactieve and rendered real time. This is the so-called graphics explosion trend. Cloudalize’s platform has many use cases: 3D collaboration, cloud gaming, software distribution, education, AI, mobile virtual reality, mobile displays and graphics for high performance computing (HPC). One specific use case is the distribution of game engine-based applications in real estate. Virtual real estate is the fastest growing vertical. The graphics explosion trend is obviously very relevant for the real estate business. Cloudalize distributes real-time rendered, interactive content on any device. It speaks for itself that it provides so much more value if a buyer or investor is able to interact visually, in a nearly realistic viewing experience, with the yet to-be-built project. Thanks to our system, the user gets access to the highest-end 3D configurators and game engine-based simulation environments on any Netflix capable device.

In 2018 we will have half a million recurring revenue. Last year it was one fifth, next year should be times five to times ten. Thanks to online sales we have customers everywhere in the world. Selling online is a lead generation tactics for us. Our ideal sales partners are companies in real estate and a few other verticals who create great content. Architecture, engineering, construction (AEC) is an important market. Partners can be consultancy companies creating virtual environments or GPU-accelerated software developers. Virtual real estate, however, is the exploding use case. That’s why we opened an office in New York on the BelCham site. The US are the largest real estate market and if you’re dealing with real estate, you simply have to be based in New York.

Our biggest mistake was not going to other markets earlier to find early MVP prospects. In Europe we were first growing quickly in the Netherlands - a much more mature market than the Belgian market when it comes to cloud adoption readiness. The same willingness applies for the Nordics and the UK. Our initial largest customer was located in Paris, not in Belgium. You could say we are easily breaking through anywhere in the world except in Belgium. Although we have a few very early customers and partners in Belgium and in a few years Belgium will surely catch up in terms of cloud adoption maturity.

We built our first large scale data center location in London. The UK is a leading market for cloud adoption and one of the first countries in the world to enact a BIM level 2 mandate. This mandate is a strong driver for our cloud service in the small and medium business AEC market. From London we cover Western Europe pretty well, but not much beyond. That is why we are now opening a second data center location plus sales office in New York. Next to Gent and New York, we have sales offices in Amsterdam and London and a development office in Romania. In 2019 we plan to open a sales office and data center location in Asia.

Ready for hypergrowth

The demand for our services is starting to explode and we are ready to cope with it. The Series A-funding we received will be invested  in further market expansion, with a key focus on the American and Asian markets. The investment will help fuel the growing demand for GPU based services  globally. Our growth rate in the US is going to be limited not by the market but by our own capability to cope with it. Next to international expansion, the funding will also enable the recruitment of more technology experts. Our goal is to make our platform the world’s leading cloud platform for delivering GPU-on-demand.

Order now the book 'Belgium's cutting-edge entrepreneurs' with more than 40 cases of successful scale-ups and start-ups and over 40 quality pictures by some of Belgium's best reputed portrait photographers. www.belgiumscuttingedge.com