Smart Skin Raises $3.9M In VC Funds
January 15th, 2014
Fredericton-based Smart Skin Technologies has landed $3.9 million in venture capital and angel funding to ramp up sales and development of its pressure-sensitive product that improves the manufacturing process of beverage makers.
The company said in a press release today that it received backing from new institutional investors Rho Canada Ventures, Build Ventures and GrowthWorks Atlantic Venture Fund. The round also includes a second investment by the New Brunswick Innovation Foundation and contributions from several angel investors.
Started by CEO Kumaran Thillainadarajah in 2008, Smart Skin has commercialized Quantifeel, a technology developed at the University of New Brunswick that can detect pressure on a surface and chart the pressure in real time on a computer or device. After developing a few applications, the team hit on the product for the beverage industry that immediately drove sales higher.
Food and drink companies with huge production lines have problems regulating the flow of cans along the lines. If too many cans pack the lines at once, bottlenecks occur and the system must be halted and fixed, reducing productivity. By placing Quantifeel drones (fake cans lined with Smart Skin’s pressure-sensitive device) in the production line, production managers can monitor the pressure and motion in the lines and prevent bottlenecks from happening.
“We had very encouraging pickup by customers with this product,” said Thillainadarajah in an interview Tuesday. “We’ve sold quite a lot and we’ve raised this money now to ensure that we have a successful take up by customers. “
Peter Clark, Vice President Investments at GrowthWorks Atlantic, said his organization invested in the company because SmartSkin has established itself as a leader in bringing sensor technology and advanced analytics to the multi-billion dollar bottling and packaging industry.
“I have been following Smart Skin Technologies’ progress since I first met Kumaran when he was student at UNB,” said Clark. “The company’s talented team, strong value proposition and impressive customer list attracted me to invest now.”
In the past two or three years, New Brunswick has developed a number of information technology businesses that improve efficiency in manufacturing processes. This group, which includes Xiplinx Technologies Ltd., RtTech Software and Eigen Technologies, are becoming the nucleus of what some hope will become a cluster of tech companies meeting the needs of manufacturers, so they can collaborate in training, marketing and other pursuits.
With the investment in Smart Skin, Rho and Build have both completed three investments in Atlantic Canadian companies. Rho Canada Ventures, the Canadian arm of Rho Capital Partners, which has offices in Palo Alto, Calif., New York and Montreal, has also invested in the last year in two Halifax companies, Karma Gaming and Analyze Re. Build Ventures, the regional venture fund backed by the three Maritime provinces, Business Development Bank of Canada and private investors, has invested in Introhive of Washington, D.C., and Fredericton and Affinio of Halifax.
Smart Skin, which was named to the Canadian Innovation Exchange’s 2013 CIX Top 20, started out by trying to develop a sensitive skin that could serve as a second touchpad on a smartphone. In 2011, the company realized a better path to market would be a product for golf — molding the pressure-sensitive skin into a golf grip to monitor the golfer’s grip on the club through the entire swing. The team originally planned for a training product, but as they talked to people in the golf industry, they focused more on a product that helps golfers choose the right club in a store.
Thillainadarajah said the golf product is now “moving at its own pace” and that it is still important because golf is a beachhead for the broader sports products industry. The immediate opportunity is the beverage industry.
“Their customer list is global and it’s blue chip,” said Rob Barbara, a Partner at Build Ventures. “They’re having conversations with the key players in the beverage industry.”