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Arm unit Treasure Data to seek buyer or IPO before Nvidia sale

New CEO says Asian expansion is priority for data-marketing company

Arm acquired Treasure Data, whose software enables companies to store and analyze customer data, in 2018.

TOKYO -- Treasure Data, the digital marketing subsidiary of U.K. chip designer Arm, will seek a buyer or try to go public before SoftBank Group completes the sale of Arm to U.S. chipmaker Nvidia, its CEO said.

SoftBank announced in September that it is selling Arm to Nvidia in a $40 billion deal. Arm's IoT Services Group, which included Treasure Data, was not part of the transaction, leaving uncertainty over the future of the company.

"We, as an independent company, have all the options available for funding," Treasure Data CEO Pankaj Tibrewal told Nikkei Asia in an interview. "Private equity, venture capital, growth capital, IPO, strategic acquisitions ... it could be SoftBank as well." Tibrewal, a former consultant at McKinsey, replaced co-founder Hiro Yoshikawa as CEO in October.

A sale would mark a new chapter for Silicon Valley-based Treasure Data and an end to SoftBank founder and Chairman Masayoshi Son's original strategy of integrating Arm-designed chips with software. After SoftBank's $31 billion acquisition in 2016, Arm made a big push into developing designs for chips in car equipment, refrigerators and other internet-connected devices. Son predicted that there would be 1 trillion IoT devices powered by Arm chips by 2035.

Data generated from those devices would be stored in the cloud and used for various applications. To pursue that strategy, Arm acquired Treasure Data in 2018 for a reported price of $600 million. Founded by Yoshikawa and Kazuki Ota in 2011, Treasure Data sold software that enables companies to store and analyze customer data. For example, a carmaker can use the profiles of visitors to its website to send them promotions about specific models they appear interested in.

Treasure Data CEO Pankaj Tibrewal. (Photo courtesy of Treasure Data)

After the acquisition, Arm worked with Treasure Data to roll out services that manage data on connected devices. But those ambitions were abruptly scaled back when Arm said in July that it would transfer the software division to SoftBank to focus on its core chip business. The next month, Arm canceled that plan and spun them off as independent subsidiaries.

Tibrewal said Son's idea is a "huge vision" that "will take quite some time to happen" and Treasure Data wants to focus on the fast-growing business of customer data platforms. He declined to comment on the valuation of the company.

SoftBank and Nvidia have said Arm's sale is subject to regulatory approval in multiple countries and will take about 18 months to complete.

Treasure Data now has about 400 clients, including Japan's Subaru, Kirin and Nintendo. "We are already a leader in the category. We want to continue extending that leadership by targeting large companies" as well as expanding into other regions in Asia, Tibrewal said. "Japan is the center for our Asia-Pacific expansion. We are trying to expand into Indonesia, Korea, Thailand and Singapore."

The company is still unprofitable. It saw a slowdown in demand in the first half of the year due to the coronavirus pandemic but is on track for profitability in fiscal year 2022, Tibrewal said. He added that the spinoff from Arm has "no impact" on its 430 employees.

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