On the brink of extinction in 2003, Quake Global has carved out a slice of the booming market for satellite-based tracking services.
Based on Clairemont Mesa Boulevard, Quake makes satellite transponders, palm-sized computers that can be used for anything from tracking tuna boats by GPS to acting as a “black box” on equipment for warranty claims, says Polina Braunstein, Quake Global’s CEO.
Its customers include original equipment manufacturers, or OEMs, such as British Petroleum, Caterpillar, Hitachi, Komatsu and Volvo. The Border Patrol, for instance, uses the devices as motion detectors in a virtual fence pilot program. And cold storage shippers use the devices to remotely adjust temperatures in transit.
It’s a $1 billion a year industry and growing. Qualcomm is the largest provider, having shipped 1.3 million units through its OmniTRACs solution to businesses in 30 countries, according to spokeswoman Christie Thoene.
Rory Moore, CEO of CommNexus San Diego, a nonprofit network of communications industry companies, estimates that Qualcomm generates $300 million in sales a year from the service.
But there are plenty of opportunities for competitors.
“Not a day goes by that I don’t hear about a company trying to make a living in location-based services , either GPS by satellite communications or triangulation through cell towers,” said Moore.
The Road To Profitability
For Quake, getting up and running wasn’t easy. It took five years to land its first major customer, Volvo Trucks North America.
“The market was not ready,” said Braunstein, citing the once high costs of satellite and wireless services.
This year, Quake will sell 140,000 satellite transponders , all made in San Diego , that average $100 to $200 apiece.
Quake Global ranks 37th on the Business Journal’s recent list of the county’s Fastest-Growing Private Companies.
Last month, it earned the San Diego World Trade Center’s Emerging Exporter of the Year award , a category created for Quake.
“They were nominated as an Exporter of the Year, but in fact received the award for Emerging Exporter of the Year because they are relatively young, but their growth has been fantastic,” said Hugh Constant, vice president of the nonprofit San Diego World Trade Center, which helps local companies find international markets.
The panel was also impressed that Quake does its manufacturing in San Diego with U.S. components where feasible, Constant said.
Quake has 32 employees and will generate $23 million in sales this year, up from $17 million in 2007, $14 million in 2006 and $7.8 million in ’05, Braunstein said.
Quake said it is the only business that designs modems for all three satellite networks , Orbcomm, Iridium and Inmarsat , each with a different frequency and language.
Its next goal is to offer a modem that switches bands so customers can purchase one product wherever they deploy their fleets, Braunstein said.
The manufacturer would like to be positioned for an acquisition, merger or initial public offering in about three years.
“It would be nice, but it’s not necessary,” she said. “We are financially stable and self-sustaining.”
A Shaky Start
Quake Global was founded in 1998 as an offshoot of Torrey Sciences, formed in 1991 to handle government contracts for building gateway stations for Orbcomm.
Torrey Sciences, however, closed when its major contracts ended. One investor, George Lingenbrink, believed in the technology and launched Quake Global, Braunstein says.
“He pulled it out of bankruptcy and started the company,” said Braunstein.
It took several years and $12 million from Lingenbrink for those patents to translate to commercial success, she says.
“The last check he wrote was in 2002, when they let my predecessor go,” Braunstein said.
“He said, ‘There are no more checks. I expect everything from the last year to be paid back. If you can’t, close the doors,’ ” she said. “I grabbed the challenge. There was nothing to lose.”
A year later, the company landed Volvo Trucks North America and soon generated $1 million in sales.
“(Volvo) trusted us,” she said. “They did not make an investment, but said if you produce a technology we like, we will buy it , like a gentleman’s agreement.”
There were times when Quake couldn’t pay salaries.
“Every time when we faced that, the team said, ‘We can make it happen,’ & #8201;” Braunstein said. “It’s a happy place now.”
