We recently talked to Qualitest regarding its acquisition of ZenQ.

ZenQ is the latest in a series of recent acquisitions by Qualitest, under the ownership of PE BridgePoint. The company acquired four firms in 2021:

• QA InfoTech (QAIT) in Bangalore, doubling Qualitest’s presence in India
• Olenick in the U.S.
• Telexiom in Germany
• Comply, an Israeli company that added a specialized capability in healthcare regulatory compliance.

The latest addition, the Dallas-headquartered ZenQ, aligns with Qualitest’s objectives to build digital transformation capabilities. It strengthens Qualitest in DevOps/continuous testing consulting and brings specialized digital expertise such as AI and blockchain. Finally, it opens Qualitest to the world of product engineering QE, around high-growth areas such as connected devices/IoT, including AI-intensive equipment such as drones.

Continued Expansion in Digital

ZenQ brings capabilities in digital, including blockchain testing. The company has worked primarily for ISVs across various verticals and use cases. Blockchain QE adds a niche high-growth area of expertise to Qualitest’s expanding digital testing portfolio. The company has already expanded to RPA/bot testing and application migration to the cloud testing. Also, its December 2019 acquisition of Israeli start-up AlgoTrace helped kickstart its AI offerings, focusing initially on data science. Since then, Qualitest has expanded its AI analytics and automation portfolio in visual testing and test case optimization areas.

Qualitest Enters Connected Device Testing

Importantly, ZenQ adds expertise around connected devices across various products, including drones, petcare and medtech devices, smart home and logistics products, and solar panels. The company is active in product engineering, in specialized services such as communication protocol QE and interoperability. This brings Qualitest to a new world of bundled hardware and software, where software (e.g., embedded software, mobile apps) plays an increasing role and where Qualitest has its roots. With ZenQ, Qualitest expands to hardware testing, where lab-based automation emerged only a few years ago.

Importantly, connected product testing also brings AI, notably computer vision, e.g., for use cases such as inspecting the quality of goods produced in a manufacturing plant, monitoring the health of forests and crops, or animal geo-fencing. Qualitest has experience in this space and has developed its AI-based IP Test.Validator for image recognition.

Further Scale

In addition to its portfolio expansion toward digital QE, ZenQ reinforces Qualitest’s capabilities in three countries:

• Its onshore presence in the U.S. and Canada (Toronto)
• Its delivery capabilities in India, adding Hyderabad to Qualitest’s presence in Bangalore and Noida.

In total, ZenQ has ~700 employees.

The integration journey for ZenQ and Qualitest is in its early stages. Cross-selling is a priority. From a portfolio perspective, expect Qualitest to bring further quality engineering and AI capabilities to ZenQ’s projects. For Qualitest, assuring product engineering is a new field with tremendous growth potential, and we expect the company to invest in QE automation in this space.

Meanwhile, Qualitest still has bold growth ambitions. The company has aggressive plans to reach $1bn in revenue in the next two years. Further acquisitions to gain scale both onshore and offshore and expand the portfolio to digital are likely.