With a valuation of just over $600 million, Quixey was not quite a unicorn, but it is one of the biggest Silicon Valley startups to go out of business thus far in 2017. The Mountain View-based developer of mobile search platforms and digital assistants folded in May after raising $165 million in venture money, with Chinese giant Alibaba as its single biggest backer. But according to USPTO records, it is not Alibaba but Samsung Electronics that is poised to come away with most of the company’s patent assets after a series of assignments in October.
Quixey made eight separate assignments to Samsung Electronics on 19th October, totalling 194 properties. An annex attached to each assignment shows that when including applications and non-US patent rights, the total number of assets changing hands is 487. While the large majority of the portfolio is US-based, it also contains PCT, Chinese and South Korean rights. All of the applications were made in 2012 or later.
The startup had been around since 2009. It originally focused on building a better search engine for mobile app stores, later transitioning to building a digital assistant. Along the way it attracted investments from Softbank and Goldman Sachs, but its biggest backer was the Alibaba Group. Axios has an interesting blow-by-blow of Quixey’s demise which makes clear that a souring relationship with Alibaba was a big factor.
Of particular interest: Alibaba made a $30 million secured loan to Quixey in summer 2016, which gave it the right to veto future investments into Quixey. USPTO records show that one part of the security for that loan was the startup’s IP. Quixey assigned a security interest in 311 US patents and applications to Alibaba.com Investment Holding Company at the same time the loan was agreed to.
This year, Alibaba exercised its right to stop Quixey from raising new VC money, opting to wind up the business instead. In February the startup laid off all of its workers and brought in an outside firm (no word on who) to handle the sale of its IP portfolio. It would appear that much, if not all, of the portoflio has been sold to Samsung.
There is good reason for Samsung to be interested in the Quixey portfolio – it bought the company’s chief competitor, Viv, in 2016. Many of Quixey’s former employees have reportedly moved over to Viv, which was founded by the team behind Siri, since the company stopped operating.
What’s potentially more interesting is why Alibaba didn’t want the patents developed by its once-promising portfolio company. The Axios report indicates that Quixey was not able to meet its loan obligation to Alibaba, suggesting that it could have kept the securitised patents, but at least some of those rights have now made their way to Samsung. If the Chinese e-commerce giant held onto a few key rights, it hasn’t shown up in the assignment record yet.