Pakistani-American's Tech Unicorn Files For IPO at $1.6 Billion Valuation

Washington D.C. based AI technology firm Afiniti, founded by serial Pakistani-American entrepreneur Zia Chishti, has filed for initial public offering (IPO) at $1.6 billion valuation, according to VentureBeat.

Zia Chishti founded his first company Align Technology in 1997 in Silicon Valley. It creates clear plastic braces for straightening teeth by using advanced 3-D computer imaging. The technology now trademarked as Invisalign has helped millions of people straighten their teeth for a beautiful smile without enduring the pain and unsightly looks of the traditional steel brackets and wires used in orthodontics. Align Technology is now valued at $10 billion.

Afiniti:

Afiniti uses artificial intelligence (AI) algorithms to enable real-time, optimized pairing of individual call center agents with individual customers in large enterprises for best results. When a customer contacts a call center, Afiniti matches his or her phone number with any information related to it from up to 100 databases, according to VentureBeat. These databases carry purchase history, income, credit history, social media profiles and other demographic information. Based on this information, Afiniti routes the call directly to an agent who has been determined, based on their own history, to be most effective in closing deals with customers who have similar characteristics.

Investors in Afiniti's latest round include GAM; McKinsey and Co; the Resource Group (TRG); G3 investments (run by Richard Gephardt); Elisabeth Murdoch; Sylvain Héfès; John Browne, former CEO of BP; Ivan Seidenfeld; and Larry Babbio, a former president of Verizon. The company has now raised more than $100 million, including the money previously raised, according to VentureBeat's sources.

Zia Chishti and Kelsey Wirth

Align Technology:

After graduating from Stanford Business School, Chishti wore braces when working as an investment banker at Morgan Stanley. When his braces were removed he wore a clear plastic retainer. He noticed that when he did not wear the retainer for several days his teeth would move. However, putting the retainer back on helped bring his teeth to their desired, straightened state. It was this observation that a clear plastic device was capable of moving his own teeth that led to Chishti to conceive a process that became the Invisalign System.

Out-of-the-Box Thinking:

A background in computer science gave Chishti the insight that it was possible to design and manufacture an entire series of clear orthodontic devices similar to the retainer he wore, using 3- D computer graphics technology to straighten teeth. He and his co-founder Kelsey Wirth started Align Technology in 1997 to realize this vision. The process has now evolved to make extensive use of 3D printing for creating a series of braces to apply gentle pressure to straighten teeth over several months. In 2012 alone, the company printed 17 million transparent dental braces for patients.

Afiniti Target:

Afiniti has deployed over 150 programs for some of the world’s largest businesses, according to the company website.  The company says "we work with some of the biggest global brands across a wide range of sectors, including Airlines, Financial Services, Hospitality, Insurance, Politics, Retail, Satellite TV, Social Media, Telecommunications, and Utilities".

Big Names Board:

The company's board of directors includes heavyweights such as former Spanish Prime Minister Jose Maria Aznar,  former US Treasury Secretary John Snow, Shine Group’s founder and former Chairman Elisabeth Murdoch and Ivan Seidenberg, the former chief executive officer of Verizon Communications Inc.

Summary:

Zia Chishti is a serial entrepreneur of Pakistani origin. Prior to Afiniti, he founded or cofounded Align Technology, OrthoClear and The Resource Group (TRG). Afiniti, Zia's latest venture, has filed for IPO to raise additional funds at $1.6 billion valuation.

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Zia Chishti, a Pakistani-American serial entrepreneur,  founded his first company Align Technology in 1997 in Silicon Valley on the idea of creating clear plastic braces by using advanced 3-D computer imaging. The technology now trademarked as Invisalign has helped millions of people straighten their teeth for a beautiful smile without enduring the pain and unsightly looks of the traditional steel brackets and wires used in orthodontics.

Zia Chishti and Kelsey Wirth

After graduating from Stanford Business School, Chishti wore braces when working as an investment banker at Morgan Stanley. When his braces were removed he wore a clear plastic retainer. He noticed that when he did not wear the retainer for several days his teeth would move. However, putting the retainer back on helped bring his teeth to their desired, straightened state. It was this observation that a clear plastic device was capable of moving his own teeth that led to Chishti to conceive a process that became the Invisalign System.

A background in computer science gave Chishti the insight that it was possible to design and manufacture an entire series of clear orthodontic devices similar to the retainer he wore, using 3- D computer graphics technology to straighten teeth. He and his co-founder Kelsey Wirth started Align Technology in 1997 to realize this vision. The process has now evolved to make extensive use of 3D printing for creating a series of braces to apply gentle pressure to straighten teeth over several months. In 2012 alone, the company printed 17 million transparent dental braces for patients.

Align Technology went public in 2001 raising $130 million by selling 10 million shares at $13 each. The company's 2013 revenue was $660 million and net income was $65 million.

Chishti also started The Resource Group (TRG) in Pakistan in 1999. TRG Pakistan claims to be "the country’s largest provider of BPO services with 4 locations in Karachi and Lahore – Pakistan’s largest cities and financial centers". A 2005 Washington Post story introduced what TRG does in these words: "In a chic downtown lobby across the street from the Old Executive Office Building (in Washington DC), Saadia Musa answers phones, orders sandwiches and lets in the FedEx guy....And she does it all from Karachi, Pakistan".

Chishti also founded OrthoClear in 2005 along with several other former Align employees to compete with Align. OrthoClear received $10 million in VC funding from London-based 3i Group and set up its production facilities in Lahore, Pakistan. Soon after, Align Technology slapped OrthoClear with a lawsuit for patent infringement and filed a parallel petition with the US International Trade Commission for unfair competition.

Align claimed that OrthoClear utilizes Align's trade secrets and infringes twelve Align patents, comprising more than 200 patent claims, in the production of the OrthoClear aligners at a facility in Lahore, Pakistan. The complaint requested the ITC institute an immediate investigation and ultimately issue an exclusionary order, enforced by U.S. Customs and Border Protection, excluding OrthoClear aligners from importation into the United States.

OrthoClear Inc. and Align Technology Inc. settled their litigation in a Consent Decree with a promise by OrthoClear to stop accepting cases in the United States and a payment of about $20 million from Align for OrthoClear's intellectual property.

After the Align settlement, some of OrthoClear employees left OrthoClear and joined ClearCorrect in Lahore, Pakistan.  ClearCorrect argued and the International Trade Commission (ITC) agreed that ClearCorrect and its former OrthoClear employees did not violate the Consent Order when they imported digital dental data from Pakistan to make ClearCorrect aligners. However, a Federal Circuit said last week that such rulings are not reviewable by the ITC under the ITC's own rules until after the completion of the investigation, and that the ITC never waived its rule.

The Court ruled that the language used by the parties in the 2006 Consent Order was adequate to prohibit importation by electronic transmission, and remanded the case to the ITC to determine at trial whether the former OrthoClear (now ClearCorrect) employees violated the Consent Order by transmitting digital dental data to ClearCorrect.

The Court did not reach the question of whether section 337 gives the ITC jurisdiction over electronic articles (an issue Align won with both the Administrative Law Judge (ALJ) and the ITC and now the subject of a separate ClearCorrect appeal). The case will now be remanded back to the ITC, which will presumably assign a new ALJ to handle the case going forward. So the litigation goes on while the consumers continue to pay the high price for use of clear braces.

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