Smart fabric start-up Footfalls & Heartbeats raises loan after problem with technology
Smart fabric start-up Footfalls & Heartbeats is about to close a $250,000 convertible loan after having to pull a crowdfunding campaign in September and let go its newly-hired chief executive after a problem emerged with its technology.
The Auckland-based company signed a licensing deal with German medical company Medi in March for its first application for the compression sensor fabric which allows a standard measure for bandaging.
The technology can help medical practitioners and patients to more easily and reliably apply accurate compression levels when treating venous ulcers, one of the most common problems affecting the ageing population globally.
However director Brent Ogilvie said further testing with Medi revealed a repeatability issue - the technology could accurately measure the bandage compression on their first application but not when they were re-used.
"We need to address that to maintain the licensing deal and because the crowdfunding offer was based on the licence, we felt it was appropriate to pull the offer," he said.
The near $130,000 already raised of the $250,000 sought on crowdfunding platform My Angel Investment was returned to investors in September and chief executive Daniela McKenzie who had only recently joined the company lost her job. The crowdfunding offer valued the company at $7.49 million before the cash injection.
The convertible loan, which gives lenders the option to convert what's owed into stock within a certain timeframe, has been raised largely by existing investors, Ogilvie said. "It was difficult to set a price for equity right now as we don't know how we will go addressing the repeatability," he said.
The loan will be used to do further research on that issue and for business development on applications where reuse of the technology is not a requirement, he said.
That includes monitoring bed-ridden patients for bedsore risk and monitoring seat postures of patients in a wheelchair. The company is talking to hospital bed and wheelchair manufacturers in New Zealand and elsewhere about potential licensing deals, he said.
Company founder Simon McMaster, a UK-based Kiwi with a degree in nanotechnology, took 10 years to develop the patented technology for smart textiles which can act as sensors.
The technology uses micro-scale interactions with the textile to make the fabric itself the sensor, avoiding the need for wires and electronics at the site of the sensing. Potential uses include for medical, recreational, and sporting applications.
McMaster remains one of the company's major shareholders along with Ogilvie Holdings and the New Zealand Venture Investment Fund. He resigned from the board in February and only two directors now remain - Ogilvie and Gary Pace, after three directors left in October including former managing director Roland Toder.
Ogilvie said further capital will need to be raised next year to help reinstate management staff.
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