ÅF Makes First Acquisition in Digital UX. Well Done!

/ October 17, 2017/ ÅF Pöyry / AFRY, UX

ÅF made an unusual acquisition today with the purchase of inUse, a Swedish UX agency servicing major firms such as AstraZeneca, IKEA, Stockhom’s metro, and Panasonic. inUse brings 100 FTEs in three cities in Sweden (Stockholm, Gothenburg, and Malmö), as well as in Denver, CO. Its revenues are SEK 90m (~USD 11m).

While most IT services vendors have rushed in buying UX firms and digital agencies, major ER&D vendors had acquired analytics services but rarely digital UX firms. Why should have done so? UX really refers to IT services, and the work done by several digital agencies.

This is not as simple as it sounds, I think.

UX design is far from being confined to websites and mobile apps: it has expanded to physical products (the success of Apple products come to mind).With software and embedded systems being pervasive, the limit between physical and digital products has blurred. And indeed, inUse has both digital UX design capabilities as well as UX design service around physical products (e.g. it designed a smart phone for Ascom for use by medical staff). inUse also re-designed a control system room for Stockholm’s metro.

ÅF’s acquisition of inUse therefore makes sense, and ÅF is keen to mention it has design skills around in architecture, landscape architecture, light and in industrial design. In total, ÅF has 600 designers. This is becoming significant. .

What is the competition doing? Few competitors have gone as far as ÅF just did. That’s not to say the competition is completely inactive. Aricent owns an industrial design firm, frog, with 400 FTEs, since 2004. Also in the past two years, Tech Mahindra acquired a legend in automotive design Pininfarina, and Akka took over the bankrupt Bertone. Yet Pininfarina and Bertone were specialized in design of physical products (and mostly cars).

Bottom line, ÅF did a small but strategic acquisition. Does it show the influence of ÅF’s new CEO, Jonas Gustavsson, who seems to be keen on digital? Or was is it in the pipeline of ÅF before Mr. Gustavsson joined. We will know more when ÅF has its Investor Day next month.

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