Extending its equity investment activity into the product lifecycle management (PLM) space, SAP AG today said its venture capital unit had bought a stake in Right Hemisphere Inc., a vendor of software for visualizing and exchanging 3D CAD and other design data.
With the investment, SAP Ventures becomes the latest in a series of venture firms that have put money into Right Hemisphere. SAP declined to say how much it invested in Right Hemisphere or what percentage of the privately held company it now owns. SAP Ventures, which has made 75 venture investments since 1997, usually places between $1 million and $4 million in early round investments, said Lisa Reeves, senior vice president for SAP Ventures, in an interview with Managing Automation. SAP Ventures currently has 30 active investments.
Munich Venture Partners participated with SAP Ventures in the latest round of venture investment in Right Hemisphere.
The SAP Ventures investment comes despite the fact that SAP AG currently has no strategic relationship with Right Hemisphere. Reeves said SAP Ventures decided to buy into Right Hemisphere primarily because it offered an attractive investment opportunity.
"It is an impressive solution, it's in a large and growing market, and it has a good installed base and management team," Reeves said. "That made Right Hemisphere a great venture investment for us."
Right Hemisphere's products — RH 5 Deep Server, RH 5 Enterprise Connect, RH 5 Deep Exploration, and RH 5 Deep Creator — allow manufacturers to translate design documents from 130 different CAD file formats into more standard formats, such as Adobe's PDF and Microsoft Office applications. Using Right Hemisphere tools, manufacturers can also build workflows for distributing product and design information to business units that may not typically have access to 3D CAD software, such as a marketing department.
Workflows and design information created and formatted using Right Hemisphere tools, for example, are used to support collaborative development, sourcing and supplier communication, technical publishing, and post-sales service processes, said Rix Kramlich, Right Hemisphere's vice president for worldwide marketing. The products are often used as a visualization and communication layer on top of PLM suites, he said.
A 10-year-old company, Right Hemisphere has grown rapidly of late, Kramlich said. The company has 150 employees and more than 500 customers, and has focused on aerospace & defense, automotive, consumer products, and medical products verticals. Its customers include Boeing, Airbus, Pratt & Whitney, DaimlerChrysler, and Siemens.
While Right Hemisphere does not have a strategic partnership with SAP, the company's products fit well with SAP's suite because both companies' products touch employees in a number of functional organizations, Kramlich said.
In some cases, SAP Ventures' investments have been a precursor to tighter strategic relationships between SAP and small start-up vendors. Manufacturing operations management software vendor Apriso and price management software vendor Vendavo, for example, have both become SAP partners since receiving SAP Ventures investments. Factory Logic, a lean manufacturing software vendor, was acquired by SAP late last year after receiving an investment from SAP Ventures.
Right Hemisphere's current technology partners include Adobe, Dassault, Autodesk, UGS, and Microsoft (for infrastructure such as .NET software).
Prior to receiving the investment from SAP Ventures, Right Hemisphere had received two rounds of venture funding. A 2003 initial round raised $4 million from Sequoia Capital. A second round, in 2005, netted $12 million from Sequoia, Sutter Hill Ventures, and NVIDIA, as well as Adobe and Microsoft.