Start-up senses opportunity with smart fabric

16:00, Nov 30 2013
 UK-based Kiwi scientist Simon McMaster
HUGE POTENTIAL: UK-based Kiwi scientist Simon McMaster developed the smart fabric with many potential uses.

Technology start-up Footfalls & Heartbeats is on the verge of closing its fundraising round, having secured the $1.5 million it was after to commercialise its smart fabric.

The company had initially sought only $1m but gave itself the ability to take an extra half million more.

Managing director Brent Ogilvie, himself an investor, said $1.2m was already committed, and it looked likely the remaining $300,000 would be secured within days.

The company has developed a technology that essentially weaves conductive fibres so that they can act as sensors.

The fabric has multiple potential uses in the medical, sports/recreational, and military sectors.

Already the company has signed a licensing deal with US medical equipment company Carolon, which is launching a smart sock in January using Footfalls technology. The sock, which will be used in the treatment of venous ulcers, a form of ulcer treated using pressure. It will allow precise monitoring of pressure levels, Ogilvie said.


Footfalls put out an offer document for the fundraising under the little-used venture capital exemption system, which allows small start-ups to avoid having to put out a costly prospectus when raising money. The offer document claims the "medical compression" market alone is worth over US$2 billion.

But the main opportunity could lie in creating clothing able to measure functions like heartbeats, temperature and respiration.

Future possible applications include comfortable clothing monitoring infants' heartbeats, as well as clothing which allows information to be gathered on the performance, for example, of sportspeople or soldiers on deployment. Ogilvie said there was also a growing market known as the "quantified self" market, where individuals keep tabs on their own health and performance through 24/7 monitoring of their vital signs.

Ogilvie specialises in raising capital for technology start-ups through his company, Pacific Channel. He said Footfalls, which was founded on technology developed by UK-based Kiwi scientist Simon McMaster, has been pleased with the calibre of shareholders it has signed up.

They include Dr Gary Pace, a director of several listed medical companies offshore and Forsyth Barr chairman Sir Eion Edgar. Also among the shareholders is Jeremy Collins, who built the Selecon lighting company and sold it to giant multinational Phillips in 2009. Existing investors include Wellington's Sparkbox Ventures and the government-backed New Zealand Venture Investment Fund.

The business model Footfalls is pursuing is one of licensing its technologies to others, said Ogilvie, rather than trying to develop, manufacture and distribute products itself.

It will earn its revenue stream through royalties and other fees. It's hopeful that once those royalties start kicking in next year that it will be able to support its expansion without any further funding rounds.

In the offer document to investors, Footfalls identifies 14 potential global markets with a combined market size of more than US$45b. "That's too many for us to go after as manufacturer or marketer," said Ogilvie.

The royalties model, backed by patents, gives the company a viable means of getting products to market as well as establishing itself with possible trade buyers which could eventually give shareholders an exit.

Sunday Star Times