Replay Technologies was acquired yesterday by Intel for $175M. This acquisition comes after an existing relationship between the two companies formed in January of this year when Intel announced a partnership with Replay, reporting that Replay would cover most major live sporting events. The collaboration resulted in the creation of 360-degree replays of NFL football games.
What’s noteworthy about this acquisition, apart from it being Israel’s latest big high-tech exit? A couple things, actually. For Zirra, with Replay being acquired for $175M, it puts our benchmarked exit valuation of $150-200M right on point. Additionally, Replay was the first company we covered for a client, so it has some sentimental value for us. In a way, Replay is our first exit.
Searching for an Opportunity
In the summer of 2015, a potential established investor that ended up investing in the company (note: we do not disclose our clients' identity) requested a full report from Zirra about Replay. Given that a competing company of Replay, Hawk-Eye had made a paltry $30 million dollar exit after more than a decade in the field was certainly reason to pause. Replay was doing well, but as an investor the company needed to know what would make this different. They needed to know what were they doing right, what wrong, and where the market was headed.
Now, the decision to invest in Replay wasn't because Zirra gave the company a recommendation - that’s not what we do. Rather, after reading the extensive Zirra report filled with unique insights and analyses, the firm now had additional insight to be able to make an informed decision about this potential investment. The fact the investor decided in the end to invest in the company that has now made an exit is an all-around win.
Insights from the Zirra Report
The Zirra Report covered a lot of important ground in order to paint the big picture anyone would need to invest responsibly. In addition to in-depth research, surveys were run to gauge crowd sentiment on a number of factors allowing us to report on issues such as brand recognition and price elasticity - how much users might be willing to pay for the product as a value added service.
Additional sentiments were detailed, giving a balanced view of potential risks and success factors. For example, with regards to competition, the report concluded: “Survey sentiment paints a mixed picture for Replay Technologies. On the one hand, there is a strong expectation this technology will become standard, so the opportunity is huge. However, 63% believe the market will be hyper competitive and that no single product will gain dominance simply due to its brand.”
And while our crowd sentiment found that “Replay Technologies and FreeD are not recognized brands”, the company’s “Samsung affiliation adds confidence to the solidity of the investment.” The report itself said that Replay was currently worth $141 million and that the technology was showing a lot of interest and potential for further growth.
Find Your Slam Dunk
We’re happy to have been a part of this journey. In the end, we were able to provide him with insights and crowd wisdom which put him in the position to make an informed decision. This ended not only with a successful investment in Replay at just the right time, but also a successful exit.