Edisse falls-detection device raises investor interest
The recent design launch of Sydney start-up Edisse’s falls-detecting wristwatch has garnered interest from potential backers, with two-phase technical trials slated to begin next month.
“We had some really good feedback and a couple of investors are interested,” Edisse’s Nick Tong said of the February 27 launch at the University of Sydney.
Edisse's watch – which logs data in real time from a SIM card to a cloud-based reporting system, and is accessed by smartphone, tablet or PC – will be worn by 350 test subjects during the two four-month trials. It is hoped the product will be commercialised by mid-2014.
The watch’s genesis came from the team’s interest in disability and aged care – co-founder Angela Mariani works as a carer – and Mr Tong’s personal experience when his grandfather had a fall.
The project has run at a hectic pace, and it took the team only three months from inception to the prototype launch. Edisse expects the technical testing – which will take place in aged care facilities, hospitals and with individuals in the broader community – to throw up another two versions of the watch.
The expected cost of the system, at around $30 a month per unit, compares favourably with other products and services in the market.
Mr Tong said Edisse had benefited from a certain amount of serendipity that many local start-ups struggle to attain.
“I think in terms of Australia, venture capital is a lot harder to find, especially for hardware start-ups, because the capital required is much bigger,” he said.
“But that said, we’re very specialised and we’ve found some very specialised investors who are keen to invest in health.”
Crowd-sourced capital is not being ruled out by Edisse, but Mr Tong said there were certain barriers that needed to be taken into account, such as crowdfunding giant Kickstarter’s restrictions on medical and safety devices.
Mr Tong had good things to say about the government assistance available through the R&D Tax Incentive and Commercialisation Australia grants, but said the latter need to be extended due to the hyper-competitive environment and the size of the money pool relative to the potential for innovation.
Australian Private Equity & Venture Capital Association (AVCAL) chief executive Katherine Woodthorpe agreed that Commercialisation Australia was a good program but there was not enough money in it.
“They have a budget of about $80 million, and that includes their case managers,” Dr Woodthorpe said. “It’s really a very small drop in the ocean for what’s required.”
Dr Woodthorpe noted the stark reduction in funding compared with the defunct Commercial Ready program, which had a budget of $500 million, but welcomed the federal government’s plan to inject $350 million into its Innovation Investment Fund if re-elected in September.
Now AVCAL is hoping the Coalition will match that policy commitment.
However, Dr Woodthorpe said entrepreneurs – some of whom have been known to “give a lot of stick” to the VC industry about its perceived shortcomings – needed to be more willing to help themselves, do the work, use the many resources available to them, and not succumb to the culture of entitlement.
One fund manager, whose specialty is helping healthcare start-ups get off the ground, said there is plenty of interest in the sector, but it is not without its challenges.
“Institutional investors don’t necessarily find it that easy to invest in,” the manager, who agreed to speak to Pulse+IT off the record, said. “Just understanding the area can be a little bit tricky.”
He said that the specialist knowledge required is too complex for many funds to assess properly.
“It’s difficult to access the problem sometimes,” the fund manager said. “I think entrepreneurs have a great interest in health. You’ve got a bunch of people who are willing to take on risk, and spend their time and money solving a problem that helps everyone. Normally you’d say, ‘This is a great thing’, right?
“But all too often it’s difficult to access the real problem, it’s difficult to access the real users, and to really understand.
“The problem in health is that often your end customer could be a health professional, it could be a government, and sometimes accessing them can be difficult.”
Although the manger's fund is of a smaller size in a niche market, he said that was no barrier to healthy profits, and he expected it to make the same level of returns as other funds.
Making the necessary connections to people and ideas on the journey from problem to solution is also a difficulty facing health IT, and Mr Tong knows this first-hand.
“We’re always happy to talk to more investors – the more the merrier, obviously,” he said.
However, it’s the residents, patients and the community – along with workers in nursing, allied health and aged care – who Mr Tong said will determine Edisse’s final success or failure.
“Getting their feedback, seeing what their thoughts are, and where we can go with it, is the main thing right now,” he said.
Posted in Aged Care