Chaos, the Bulgarian provider of photorealistic rendering technology, and Enscape, a German company developing real-time rendering and design workflow technology, announce their merger today with the vision to become a world leader in the 3D visualization and design workflow software sectors.
The joint agreement is backed by two private equity firms – the American TA Associates, and the German LEA Partners which is a previous investor in Enscape. The investment will allow the newly-formed company to focus on growth, technology innovation, and team development. The merger deal is of an undisclosed amount and is expected to pass customary regulatory approvals and be completed in the first quarter of 2022.
The new company will keep the Chaos name and will focus on developing a full-spectrum portfolio of visualization and computer graphics solutions for the Architecture, Engineering, and Construction (AEC), Visual Effects (VFX), and Product Design verticals.
“Visualization is critical to creating the future—both in the real world and the metaverse. We are excited to team up with Enscape, TA, and LEA Partners to bring forth the world’s best 3D visualization ecosystem. This partnership is a logical next step towards the growth strategy that Chaos has announced in early 2021. It was focused on the development of a complete technological toolset for the full workflow of the 3D artists and designers,” Peter Mitev, co-founder and CEO of Chaos, shared for The Recursive.
The joint future of Chaos and Enscape
After the merger, the products from the portfolios of the two companies, including leading products V-Ray, and Corona Render, will continue to be available and operate under their respective names.
The CEO and co-founder of Chaos, Peter Mitev, and the CEO of Enscape, Christian Lang, will become co-CEOs of the newly-formed company. Vladimir Koylazov, the other co-founder of Chaos and current head of software operations, will also retain his leadership position and drive R&D and innovation.
The new company will be headquartered in Karlsruhe, Germany, and will have additional offices in Sofia (Bulgaria), Prague (Czech Republic), Tokyo (Japan), Seoul (Korea), Los Angeles, and New York. The joint venture will employ more than 500 people across the globe.
The Sofia office will continue to operate as usual and will be the center for development and support for the current Chaos products and services. It is expected that Chaos will open 50 new positions for the Sofia-based team in 2022.
The two visualization pioneers
Chaos was founded in 1997 by the two Bulgarians and graduates of Sofia University St. Kliment Ohridski, Peter Mitev and Vladimir Koylazov. For the 25 years it has been on the market, the company has grown into a global leader in computer graphics technology. It specializes in the creation of photorealistic imagery and animation and in the development of 3D rendering and simulation software. Its most advanced solutions include ray-traced rendering, cloud rendering, and real-time exploration.
Chaos’ technology which has been honored with an Academy Award and an Engineering Emmy allows artists and designers, architectural firms, and advertising agencies to create photoreal imagery, visual effects, animations, TV, and feature films. The flagship software of Chaos, V-Ray, has earned a name as the go-to visualization tool and has been used in the design studios for Game of Thrones, Halo, and Terminator. Besides V-Ray, Chaos has also developed and acquired other connected visualization tools, including Corona Renderer, Phoenix, Cosmos, and Vantage.
Enscape was founded 20 years after Chaos, in 2017, by the Germans Thomas Willberger and Moritz Luck, and was managed by Christian Lang in the role of CEO. The company develops real-time rendering and virtual reality software that allows its global customers from the AEC industry to do faster concept iterations, and collaborate in real-time. Enscape combines design and visualization workflows and enables designers to create realistic renderings which are based on existing planning data.
What led to the merger
A couple of months ago, in an interview for Forbes Magazine Bulgaria, Peter Mitev shared that one of the big challenges they were facing was that they have grown too much, which according to him slowed their future development. Before the pandemic, in 2019, Chaos reported revenue of around $27M and a net profit of more than $6M. In light of this, the global visualization and 3D rendering software market which was valued at $1.48B in 2019, is already projected to reach $7.96B by 2027.
That is why Chaos decided to change its strategy and transform the company into a multi-product company. “Until now we were known for having several very strong brands. We are currently transforming into a company of many brands, which will be part of one ecosystem. We are building a visualization ecosystem as part of which we will expand a lot more of what we are offering. Our new strategy sets much bigger ambitions as an organization. This may lead to prospecting for external capital,” Peter Mitev said in an interview in July 2021.
Similarly, Christian Lang, CEO of Enscape, shares in the official press release that the company had been experiencing a period of accelerated growth, outpacing its fast-growing market. He remarks that from the perspective of Enscape, the merger will allow the company to scale and realize its vision to develop an end-to-end 3D visualization product portfolio. In this regard, Lang also recognizes that the two companies share the same vision and in addition have highly complementary technologies and capabilities.