Christian Tang Jespersen

The untold story behind one of Europe’s largest exits 2017 - Heptagon

Annika Sjöberg, NGP

This is the remarkable survival story of Heptagon, a media-shy company that went from the brink of bankruptcy to become a billion-dollar exit and the world’s largest micro-optics supplier.

On a crisp January winter morning in Copenhagen, Christian Tang-Jespersen, the former CEO of Heptagon, and NGP’s Bo Ilsoe, a major investor in Heptagon, sat down to share the behind-the-scenes story of Heptagon for the first time.   

In 1993, a team of researchers spun off a university project in Finland, and started a new business around micro-optics, which they named Heptagon. Business was slow, and it would take the team nine years to launch their first product, which happened only after Heptagon acquired a wafer optics lab in Switzerland and opened an engineering site in Zurich. However, after the launch in 2002, it was clear that the product had potential and there was a large client in sight – Nokia. Things started to look bright in 2006. NGP made its initial investment in the company and simultaneously, the world’s largest mobile device manufacturer at the time, became a customer. Heptagon opened a high-volume manufacturing facility in Singapore in 2008 to meet the demand.  

Timeline of the milestones during the company’s lifecycle

The hard times begin

But Heptagon had placed all their eggs in one basket, and the risk behind being dependent on one single large customer and one product category, wafer level optic lenses, started materializing in 2009. The financial crisis hit the entire tech industry, buyer volumes lowered month by month, manufacturing lines had to be stopped, the appetite for wafer level optics lenses diminished and investors raised concerns around how management was handling the crisis. By that time, Bo had worked systematically on a heavy recapitalization of the company and had beefed up the investor syndicate by inviting several strong investors from Asia including GGV Capital and Temasek, to join as co-investors. GGV’s Kheng Nam Lee stepped in as the new Chairman of the company.  

Simultaneously, Bo had been pitched by a small wafer packaging company called Hymite, a company run by a fellow Dane who was familiar with the semiconductor industry and based in Singapore. Bo never invested in Hymite but he did introduce their CEO, Christian, to the other investors in Heptagon in the hope of getting some advice on the Heptagon business. In 2010, Christian sold Hymite to TSMC and was in the process of moving back to Copenhagen with his family when he was approached with an offer to take the reins of Heptagon.  

BI: I was impressed with Christian and thought he could be someone who’s perspective we could really use given that he had dealt with large OEM customers in his previous roles and was close to the semiconductor industry.  

CTJ: I had met with the Heptagon team and with some of the investors a couple of times to give some advice on the company, and we had stayed in touch since.  

“I knew how bad things were at the company, but was compelled with the team and ultimately, I could not figure out why such a unique technology, verified by Nokia, could not be more in demand!”  

CTJ: I had grown fond of the core team at Heptagon, they were skilled, reliable and willing to make this work. So, I told my wife that this would be a two-year journey maximum. It was clear that either we had to merge with someone who could pick up the technology or we had to cut costs and sell it fast.  

CTJ: At the time I joined we had a revenue run-rate of $25M, and we lost enormous amount of cash every month during my first year on the job. The CFO at the time, had prudently prepared a draft chapter 11 filing which he presented to me the first week. Basically, we were going out of business. Our biggest customer at the time was Nokia, and we were losing money by the hour since we could not make any money on the product margin. I had to let go of a large amount of the team during my first months so it was quite a rude awakening for us all. Literally no one was convinced that the company would survive as a standalone. I could only focus on stopping the bleeding and did not have much time to look towards the future. That was our reality. At the same time, in the back of my mind the same question kept bothering me, “If no one else could build this technology outside of Heptagon, how can we not redesign our business model making it commercially sound? We all wanted this to be a success and eventually, we managed to turn the mentality around to focus on the positive – on the team and technology”.  

Turning the company mentality around was the first step of many in transforming the business.  

Restructuring every part of the company

In 2010, Christian was in his first year on the job. Nokia had put front-facing cameras in their phones but Heptagon, which had specialized in making front-facing camera lenses, saw that the feature was not indispensable for the consumers. While they had a large part of the market, they could not push up their margins, and there was no pride in being a market leader for a feature people did not see as necessary. The financial struggles at Heptagon continued, and they could barely stay afloat. The company switched headquarters to Singapore to get closer to the manufacturing lines, and had to change many of the key roles within the company.  

CTJ: “We found ourselves in a situation where we were making market-leading technology but not market-leading products – they were just nice-to-haves, not need-to-haves – so we didn’t earn much on the dollar and honestly, our confidence reflected this.”  

Then came Apple’s launch of FaceTime. Suddenly, everyone went crazy for front-facing cameras. Although the attitude switch in the market benefited Heptagon, they knew they could not compete in the technology war on imaging lenses in the long run, so they started to restructure their product lines toward developing lenses for LEDs, flash, light sensors, and an array of other products relying on the core wafer level technology. But each time they improved the technology, the smartphone company assembly lines by Foxconn and others, could not build the products with enough precision to bring out the optimal performance that the Heptagon team knew they could deliver.  

CTJ: We were hit differently this time, by the fact that other companies were not able to deliver on what our technology and products could actually do. Eventually we said; why don’t we try to build the packaging around the lenses, morphing our systems to provide not just the optical lens, but also the assembly, all built on our high level of precision and performance? That was the single most important decision we made in Heptagon’s turnaround story. It almost felt like a coincidence at the time, but ultimately it resonated well strategically to move up the food chain and control more of the system.  

CTJ: Another epiphany we had, from talking to new clients, was realizing that no one could do this better than we could, and the customers were willing to pay a premium for it. We went from an average selling price of around 10 cents per unit to more than 50 cents per unit in less than two years – for us an astounding accomplishment as we suddenly could see a path to profitable growth. More importantly, the customers were still willing to pay and was looking for the innovation in their product portfolio that our technology enabled. I was finally able to prove my original hypothesis to the team, that we had something unique that was worth paying for. We started building bigger systems and took more responsibility for the technology around our lenses. When we landed a new, giant customer, willing to pay well over a dollar per unit, a new era started at Heptagon and business really picked up. We had ultimately reshaped from being a pure tech company to become a product-focused company. The benefit of this was obvious – we suddenly had a very clear direction and our investors’ trust in us during the rough times, was now starting to pay off.  

New beginnings

The growth since 2012 was significant; clients lined up, and, by 2016, Heptagon had shipped a mind-boggling two billion units, had around 2000 employees, and had opened a 300,000-square-foot manufacturing site in Singapore to accommodate the shipping of almost a million units per day. In 2013, the company raised a whopping $270M round, which in line with its media-shy profile, was never announced.  

Christian made a conscious decision early on to avoid media appearances and interviews.  

CTJ: I just felt like that sort of publicity would not benefit us. Having some battle scars from the dotcom days, I had seen that it could be damaging for the company mentality as well. It’s not realistic to just celebrate the good times unless you are prepared to recognize the down-turns. We didn’t need the attention as we didn’t see the fundraising as a goal in itself; we just wanted to focus on the business. Nothing else mattered.              

CTJ: I remember when we shipped our first billion units. I think that was the first thing we ever actually announced. It was a significant milestone, now that we had done something not many had done, right? Shipped a billion units! This was real news as it pertained to products.  

“We had gone from deep despair, rebuilding the technology, rebuilding the team, rebuilding the whole company, adjusting to new market conditions, building up team confidence and shipping high volumes. Going from focusing on the technology to focusing on the product really changed us. “  

CTJ: In parallel, we worked hard throughout this whole journey to create the Heptagon culture, which was pretty much to stay focused on what mattered. If there were politics, gossip, or divergence going on, we immediately made it clear we did not want it nor did we accept it. We had a clear vision about how we wanted to be; every time we saw things moving away from that core, we guided it back. We had to stay grounded, and I also forced myself to make fast decisions. If we hired the wrong people, we had to let them go within six months for the good of the company. You need to stay practical, rooted and focused to be able to manage the complexities of growth like this.  

CTJ: We were also quite focused when it came to budget spend, having been through such hard times. We were not frugal – and never cheap; we just always spent money in a way that made sense. We didn’t buy expensive furniture or design, we didn’t market the company, we just focused on the business and we invested in the team and the business. One year we gave $10M back to the employees as an extra bonus. I sent an e-mail to our entire workforce saying they all had two years of extra salary in their accounts now, as an act of gratitude by Heptagon, and that was it. No one left the team as we had created a meaningful work environment.”


Opening the new manufacturing facility in Ang Mo Kio, the same size as Tesla’s first factory in Fremont

In 2017, Heptagon was sold to ams AG, an Austrian microelectronics company listed in Zurich, Switzerland. The sale to ams AG came naturally. Heptagon was the undisputed market leader, but was at a stage where it would be difficult to grow further without making significant changes. With steep growth requiring even larger investments, the time was right to make the step into something even bigger. Something that complemented the core technology of Heptagon – and ams AG did exactly that.

CTJ: The core team from my first day at Heptagon was there at the time of the exit. It’s been a wonderful experience to go through all of this with largely the same set of people. It’s built a common understanding and high degree of comfort in managing through good and bad times. But, as a CEO, you need to be very realistic and pose the hard questions about whether you are the right person for the next step of the journey. Not every CEO is good in every situation. Not everyone excels at all stages. You need to be conscious of that and frequently ask yourself; Am I the right person to take this to the next level?  


It’s a rare question for a CEO to ask himself but throughout the years, Christian always insisted on continuous assessment of his capacity in the role as CEO for a high growth company, it was part of the Heptagon culture.  

BI: I was always surprised by Christian’s ability to handle problems and set-backs in a calm and collected way. He is very analytical about problem-solving, but always with a keen eye of doing what is right for his team. I think his legal training often kicked in; separating rational analysis from emotional biases.  

CTJ: There are several things that have shaped my management style. One of my first bosses was a young counsel for a listed company; he was part of the management team and had a law degree. And he was dyslexic. He literally could not spell one word correctly. But he never let that get in the way of his plans. That fascinated me, because it’s all about willpower, turning a weakness into a strength, or even just ignoring a weakness completely. That really stayed with me because he was so smart, so open and conscious but never used it as an excuse… We all have weaknesses, but it’s really about how you treat them. Do you let them block you or not?  

CTJ: Another rule I live by is to focus on the things that you can affect and ignore the ones you can’t. If you can’t change it, just accept it and let it flow through you; these things are not for you to change. If you try, you will just get frustrated. At Heptagon, when things were rough, my team would often look at me, saying, “Christian, you should be panicking right now!” But I didn’t. It didn’t mean that I was not invested, I just felt that panicking would not help, so what would be the point?  

CTJ: At Heptagon, my team made me strong. The idea that we would “make this happen or burn together” really glued us together, and it binds us still today. It made us stable as a management team, and the rest of the company felt that stability around us. With the board, I have always driven a full transparency policy. It was also a bit uncomfortable at first because our board included many nationalities, and this was an unusual approach for some people. But it built a foundation of trust, and we could always have a very open dialogue. It made us more willing to take risks.  

After Heptagon

The core team at Heptagon often joke among themselves and ask, “Are we allowed to leave now?” They always had an implied agreement that as part of the team, they could not abandon the others. There were lot of chances along the way to give up and sell the company but they were mindful to first and foremost focus on the right fit. Even in the good times, high offers were on the table but the right home hadn’t come along before ams AG.  

CTJ: I don’t think I will ever retire from technology and business – only when no one wants my help anymore, which I hope won’t happen anytime soon. It’s hard to figure out how to give back, though. Now I spend about 20% of my time investing in cancer research, and then I spend time promoting the great technology achievements that we continue to develop in Denmark, in Scandinavia and in Europe; there is a lot to be thankful for coming from there. I also work with a lot of startups moving into a mid-growth stage, helping them benefit from the lessons I learned at Heptagon.  

There were many lessons learned for the whole leadership team and the board of directors throughout this journey. Everyone is pleased to now be able to spread that knowledge and help others that might be experiencing similar situations in their companies while the core team at Heptagon is in the search for the next big endeavor.