"The Market Has Been Unleashed"

Stratacache CEO Chris Riegel is not afraid to swim against the current. By acquiring Scala in 2016 and switching to a direct-to-business sales model, he transformed Stratacache into a global provider. Just before ISE, invidis spoke exclusively with the „Elon Musk of the digital signage industry“.

Our latest talk with Chris Riegel confirmed what we already knew from our annual interview that we conduct exclusively before ISE: Without Chris Riegel and Stratacache, the digital signage industry would not be the same. In record speed, the founder and CEO  goes through current topics and developments. Unlike his competitors, Chris Riegel is not oblidged to cater to any shareholders. He calls a spade a spade. Neither does he abide by any political guidelines which provides for a refreshing change from the revised corporate talk of market competitors. Even though the interview usullay ends with more questions than answers.

Demand in the Retail Market Is Unleashed

We spoke to Chris Riegel right after NRF 2023, the annual rendezvous of retail tech providers in New York City. At the New York Trade Show Center, located right next to the Hudson river, Stratacache’s booth was right next to Google and Intel. „This year was the busiest NRF in 25 years. After the pandemic, we see immense pent-up demand for retail projects in North America after the pandemic – as if the market has been unleashed,“ says Chris Riegel.

Stratacache/Scala at ISE 2023

While Stratacache did not exhibit at CES in Las Vegas, the company and its subsidiary Scala will be present at ISE in Barcelona – without Chris Riegel, however. Scala will present at two seperate booths: 2Q450 and 6K150.

For Stratacache, these are great conditions for growth in the coming years, as Chris Riegel sees is. In first weeks of the new year, the Stratacache Group has already recorded orders in the triple-digit USD million range. Several major customers have extended existing contracts to a long-term basis, he says. „The order volume of the first weeks of January amounts to USD 300 million,“ Chris Riegel tells invidis – without giving details. For the entire year of 2023, he expects a revenue growth of 35 to 40 percent.

Overall, 2022 Was an Extremely Strong Year

For the past year, Stratacache claimed an increase in global revenue by 15 percent to USD 1 billion. As a privately held company, the far-flung Stratacache Group – 100 percent in his private ownership, according to Chris Riegel – does not publish official financial figures, so we are unable to get independent verification for the numbers. With annual sales of USD 1 billion, Stratacache would play in the same league as its two US competitors Diversified and AVI-SPL (each USD 1.2 billion in 2021).

No Chances of Survival for Small DS Providers

For some time now, Stratacache has been watching the digital signage market consolidate at an accelerating pace. A mature market, Chris Riegel says, leaves little room for small vendors – Stratacache has its own dedicated M&A department which overlooks these developments: „Since October 2022, Dirk Hülsermann and his team at Stratacache Capital have seen a rapid increase in the number of sale offers“. The problems that tech companies have in the capital markets also affect the digital signage industry, as Chris Riegel points out. „There is no investor money anymore that keeps loss-making Digital Signage companies alive“.

Stratacache is still looking for interesting investments, as the CEO states. „We are looking for acquisition candidates that have sufficient scale. Typical digital signage providers between 1 million and 3 million US Dollars in annual revenue are too small for us; we prefer companies with USD 50 million to USD 100 million in revenue potential“.

Companies charging as little as 2 to 3 US Dollars per month for a digital signage SaaS subscription in North America cannot survive, according to Chris Riegel. „The industry has a habit of eating itself, and small providers are in a death spiral. At 2 to 3 US Dollars a month, it doesn’t even cover cloud infrastructure costs“.

Similarly, Chris Riegel expects the market to change with the exit of Korean display manufacturers – Samsung and LG – from LCD production. „With the advance of the Chinese, the (competitive) landscape is shifting“.

Read Part 2 of the exclusive interview with Chris Riegel about the potential of MicroLED and the status quo on Oregon’s first dedicated MicroLED production.