Burnaby-based Industrial Internet of Things platform developer Bit Stew Systems has been acquired by GE Digital (NYSE:GE).
Terms of the acquisition were not disclosed by either company, although documents related to the deal’s plan of arrangement filed with the B.C. Supreme Court reveal that it is valued at US$153 million, or C$207.5 million, with Bit Stew investor Yaletown Partners Inc. taking $22.5 million from the sale, making for a roughly seven-fold return on its $5.4 million Series A investment back in 2013.
“This is an exciting day for Bit Stew as we join the GE Digital family,” said Bit Stew CEO and co-founder Kevin Collins. “With this acquisition, Bit Stew gains access to GE’s industrial ecosystem, customer base, and deep domain expertise. GE’s vision of a software-defined future strongly aligns with Bit Stew’s vision and capabilities and we are excited about the pivotal role our technology can play in driving the industrial ecosystem forward.”
Founded in 2009, Bit Stew was already backed by GE’s venture capital arm, and today has approximately 100 employees, headquartered in Canada with offices in the USA, Australia and Europe.
GE’s persistence in buying Bit Stew has finally paid off, after an offer earlier this year to buy Bit Stew for US$110 million was rejected in June, sending both companies back to the drawing board to come up with a counter-offer.
Last year, at GE’s fourth annual Minds + Machines event in San Francisco, Bit Stew Systems announced a pilot program for integrating its MIx Core platform, which integrates data analysis in complex environments, with a GE Oil & Gas solution.
Although Bit Stew’s machine learning platform was being used in that pilot context for oil and gas purposes, it also has applications in the utilities, aviation, and manufacturing sectors.
“We are pleased to welcome Bit Stew to the GE Digital family. The integration of our technologies will provide the Predix platform with a greater capability to integrate data while it is in motion from the edge to the cloud,” said GE Digital CTO Harel Kodesh. “This combination will help us to accelerate our industrial offerings, providing customers with contextual understanding of their assets and operations.”
The acquisition provides Bit Stew with access to GE’s global industrial ecosystem, its customer base, and domain expertise.
At the same time as the Bit Stew acquisition, GE has also acquired Berkeley, California-based machine learning company Wise.io, which when combined with the Bit Stew acquisition, GE believes will enhance its Predix platform for the Industrial Internet as well as its Asset Performance Management (APM) application.
General Electric has indicated that the acquisition of both startups is intended to build its artificial intelligence capability, to help it compete against IBM’s Watson AI system.
In May 2015, Bit Stew raised a US$17.2 million Series B round, led by Cisco and GE, along with Yaletown Venture Partners and BDC.
BitStew had also closed the first tranche of a Series C round in May, with investors including Yaletown, GE, BDC Capital, Cisco Systems and Kensington Capital Partners.