Why did Tobii acquire Sticky?

Tobii eye tracking glasses

One month ago, on the 17th of May, Tobii announced that it bought Sticky, previously Tobii was a minority shareholder in Sticky.

Tobii is a producer of eye tracking hardware and software. Their eye trackers are priced at around 10.000 USD and upwards. Tobii is the market leader in eye tracking hardware founded in 2001.

Tobii’s eye trackers are high-precision equipment that work with infrared light that is projected on and reflected by the eye and thereafter measured by cameras that take high frame-rate images of the eyes. The eye trackers then use image-processing algorithms to calculate where you look. This equipment can give reliable results for most people. There are few limitations to what you can do eye tracking research on with Tobii equipment, basically what you can see, you can track.

Heatmap of a pesto assortment

Sticky started as part of Tobii but became an independent company in 2009/2010 because Tobii thought it to be too different from the core of Tobii and they wanted to attract investment companies for further development. This worked, Sticky received USD 6 million investment from different investment firms over the next 3 years and another USD 5 million in the last 5 years. The main investor companies were Northzone, Dawn and Conor. Despite the large investments and hype, Sticky has not been generating money.

Both Tobii and Sticky are eye tracking companies but what are the differences between Tobii and Sticky and why did Tobii acquire Sticky?

Sticky claims that what takes six weeks and USD 100.000 for a market research company, you can do yourself in 2 hours and USD 8.000 with Sticky…

Sticky uses webcams for tracking your eye and is connected to panel provision companies to source test participants. They claim to have an accuracy that is more than enough to differentiate what people are looking at for major elements of a webpage, image, or other stimuli. The average error is ca. 5% of the screen width and 7% of the screen height. Depending on your requirements, this might be acceptable or not.

The main challenge for web-camera based eye tracking is that Sticky does not control the testing environments as people sit at home. Test participants receive a web link and start the test but they move too much, have low-lit rooms, glasses, etc. This results in a low usable rate which means that Sticky advises to use a panel of 100 people to have 30 usable results. They also advise to have 30 people for statistical significance.

One advantage that Sticky offers over Tobii is that they include an emotional analysis when working with video stimuli. Meaning their algorithms can identify seven basic emotions by recognizing micro expression on our faces.

A disadvantage is that you can only track static images and no (online) user journeys and Sticky is therefore not very suitable for UX/UI research or research in real environments.

Another advantage for Sticky is that you can easily scale up your research without recruiting the people in the different countries because you can use panels. On the contrary, the market for large scale eye tracking research is rather limited.

Sticky had sales in 2016 of roughly USD 1.5 million with an EBIT of USD -2.8 million.

But why did Tobii buy back Sticky? Perhaps, Tobii will, with even more investment, try to turn Sticky into a high turn-over, profit making unit. This could potentially cannibalize sales of their high-end for research eye trackers and potentially reduce overall sales.

Perhaps, Tobii tries to learn from Sticky what they can in terms of technology and platform and then shut it down?

What do you think, why did Tobii acquire Sticky?