Startup of the Day: Latvian 3D simulation software company CENOS
Founded in 2017 by three Latvian PhDs in physics and mathematics Mihais Scepanskis, Raimonds Vilums, and Vadims Geza, CENOS develops 3D simulation and modeling platform for engineers. The startup’s solution is aimed to democratize simulation processes by ensuring easy, affordable, and secure access to computer modeling for every engineer, even those, who have no simulation experience.
Currently, CENOS has more than 100 customers, including big names from industrial powerhouses across Europe such as Volkswagen, ThyssenKrupp, and Taylor Winfield, and a total of €1.9 million capital raised. On February 2022, it closed its latest €1 million seed funding round from Startup Wise Guys and Capitalia.
In the Startup of the Day column, co-founder and CEO of CENOS Mihails Scepanskis shares details about the startup’s idea, its product, and future plans.
“The Startup of the Day column on AIN.Capital is dedicated to tech projects from all sectors that originated from the CEE countries. If you would like to introduce your project, please fill in the questionnaire.”
Tell us about your startup. How does it work?
CENOS is an engineering simulation software company. We make engineering simulation something that can be more easily accessible and ready for mass adoption. The way we do it is we help engineers to replace physical prototyping and lab testing with computer simulation, thus saving time and money for development of new industrial products and processes. It makes the iteration process faster and much more affordable.
How did you come up with the startup’s idea? What was the reason/motivation behind it?
Before us, simulation software was available for 1% of all engineers, mostly simulation engineers at R&D centers. We make it technologically and economically available and affordable for all engineers in the world. I observed rising demand for simulation technologies from small and medium-sized businesses. Nobody addressed this demand, so my co-founders and I decided to help such companies to introduce simulation practices into their design habits. That is how I turned from scientist to entrepreneur.
At that time, we already had the idea of using open-source libraries to democratize simulation. We have had experience working with those open-source tools as academic users, so we knew their pros and cons.
I’m a fan of open-source philosophy since it enables collaborative engineering. So, we decided to build a bridge between the open-source academic communities and industrial users to facilitate the more widespread adoption of simulation software technology. Actually, our company name (CENOS) stands for “Connecting Engineering Open Source”.
How long did it take to reach the prototype or MVP? What did you encounter?
It took one year to build the platform MVP, and one more year to launch the “v1” of the platform. On top of the platform, the first product (induction-heating) took almost a year as well, the second product (radio-frequency) took 9 months.
Now, with the current platform at its third iteration, the new product (wireless-charging) will be launched next month. We’ve been working on it for 3 months.
When exactly did you launch your product? Or when the launch is planned?
We started working on CENOS in March 2017. It was 3 PhDs that started working on the platform. We released an induction heating app beta in October. Our version 1.0 of the app was released in January 2019. In 2021, we launched an antenna design app, now called RF 2.0.
Tell us about the stratup’s business model. How do you monetize your product?
We often say that we sit at the intersection of deeptech and SaaS. Our pricing is a simple annual subscription per seat.
What are your target markets and consumers?
We are targeting the Computer Aided Engineering (CAE) software market, which is predicted to reach $20 billion in 2028. At the moment, we are heavily talking about the manufacturing industry. However, it also depends on the particular CENOS application, as each is geared towards a particular niche. We are also motivated by working with other engineering startups, and to this end we’ve developed an API layer for CENOS’ platform. We are providing a simulation software platform built on open source academic models, and we offer this as a plug-and-play service for startups and other businesses.
If the startup has already launched the product, what are the results: metrics, income, or any clear indicators that can be evaluated.
We have more than 100 customers, including big names from industrial powerhouses across Europe such as Volkswagen, ThyssenKrupp or Taylor Winfield.
I can mention the case of a major German engineering company, for example, that has leveraged CENOS’ simulation software to create a 90% reduction in tooling costs per part and 30% less energy usage, with an overall saving of more than one million euros per year.
We also count one of the most important satellite companies among our antenna design clients. At the moment we are at an ARR of more than €500 thousand.
What about your team? How many people are working in the startup? If you’re looking for new employees, indicate whom exactly.
We are a team of 25.
Have you already raised any investments? Provide us with more details on each funding round: the amount, investors, the purpose of the investment.
So far we have raised a total of €1.9 million. Startup Wise Guys were one of our first believers in 2017, and we received follow-on investments from them. We also received funding from 500 Startups, where we participated, and various angels. Our latest round was a seed round in February of this year. To give more detail here, the investors were Startup Wise Guys and Capitalia, with participation from Baltic angels including Uldis Sipols, formerly VP of Product Supply Purchases at Procter & Gamble.
What’s next? Tell us about your future plans.
On the product innovation side, we’re looking to release new apps to help with the most pressing simulation needs. One example is wireless charging design, but we are also looking at busbar simulation, electromagnetic sitting and more. Our open source approach also means we want to make it so that developers can build different apps on top of us, we want to create a community that multiplies the utility of our technology.
It may sound cliche, but we do want to democratize simulation software to drive mass adoption of the technology — it is a force multiplier that can create so much more efficiency. Education will also be a large part of that. Us engineers have been comfortable in the old ways for quite long.
Finally, we’re looking to grow our business geographically. We already opened an office in Mexico, a promising and growing market for us, from where we can also serve the entire American continent.