Software

Norway’s Energy Software Firm Cognite Could Opt For IPO, Says Cofounder

Norway’s upcoming software firm Cognite, known for its advanced data and digitization services for the energy sector, could opt to list its shares via an initial public offering (IPO) on the Oslo Stock Exchange, according to its cofounder and Chief Executive Officer John Markus Lervik.

In an exclusive interview on the sidelines of the company’s Ignite 2019 conference in Oslo on Thursday (June 13), Lervik told Forbes the move was a “natural route” to take for the firm he co-founded in 2016.

Cognite’s industry solutions and analytics – banking on operations and equipment sensors that help customers boost efficiency and reduce costs by several multiples – have impressed the market, with the product suite in turn helping it to grow profitably.

John Markus Lervik, Cofounder and CEO of Cognite, says an IPO is a natural route to take for the growing energy software company.

John Markus Lervik, Cofounder and CEO of Cognite, says an IPO is a natural route to take for the growing energy software company.

© STIG JARNES

In its relatively short corporate existence, the firm – 65% majority-owned by Norwegian investment outfit Aker ASA – has built a client portfolio of around 30 major names in the energy and shipping sphere, including OMV, DEW Wintershall, Aker BP and Lundin Petroleum, with Norway’s power transmission operator Statnett and shipping firm Odfjell providing domestic bragging rights.

“However, in order to take advantage of the market opportunity for our product suite and expand our business further, it is only logical to seek potential partners for the journey, both financial and digital, and parallel to it would be the natural route to list the company,” Lervik said.

Business expansion is already underway with Cognite opening offices in Austin and Houston, U.S. A presence in Tokyo, Japan is imminent, quite possibly by the fourth quarter of 2019, banking on a “strong upside” in Asia where Cognite would be targeting manufacturing, processing and shipping clients alongside oil and gas companies in South East Asia.

“Our majority owners [Aker ASA] are no strangers in seeking the IPO route. We both agree on the need for additional capital, not just for business expansion but also for mergers and acquisition opportunities, and if you are listed, it becomes easier to seek M&A.”

While the IPO could potentially happen in 2020, the Cognite cofounder said it was “too early” to contemplate whether the firm would opt for a dual-listing alongside Oslo, and the kind of market valuation it would seek.

Quite like Cognite’s majority investor Aker ASA, Lervik is also no stranger to nurturing and taking start-ups to market. Widely regarded as a serial entrepreneur in Norway, Lervik founded Fast Search And Transfer (FAST) in 1997, where he served as the CEO until the company was acquired by Microsoft for $1.2 billion in 2008.

In 2010, he founded Cxense, an ad-platform, search and online analytics specialist, listed on the Oslo Stock Exchange, with Cognite now becoming his latest endeavor.

“I have been in the software business for 20 years and counting. From my perspective, there are two very unique things with Cognite. First one is the enormous opportunity and need for the competence and technology Cognite brings to the table for heavy asset industries. The business case is several multiples larger than some of my previous ventures and the time to make that case is now.”

“Secondly, combine that massive business opportunity with an expansion network we can [and do] tap in to makes it really exciting. In little over two-and-half years, we have been able to go from a headcount of zero to 250 people and doubled our revenue – and this would not have been possible without a solid network and software competence at its core.”

Lervik added that he can envision where the company would be in two to three years in terms of business growth “knowing today” what steps his team needs to take to get there.

“We intend to continue our successful growth into a global software company by convincing our customers that we can help them achieve substantial savings across their operating board, from predictive maintenance all the way up to giving personnel digital tools to carry out their task in the most efficient way, using Cognite’s software and services.”

[“source=forbes”]