UNB Spin Out Smart Skin Technology Aims To Raise $6M-$8M
November 24th, 2015
It doesn’t take long in an interview with Kumaran Thillainadarajah to understand why Deloitte named his business, Smart Skin Technologies, to its list of companies to watch in Canada.
In the last two years, the Fredericton firm has installed its technology in 45 plants owned by some of the largest beverage producers in the world, and sales are growing rapidly. Smart Skin, which raised $3.9 million about two years ago, is raising follow-on capital, with a target of $6 million to $8 million.
“It’s great to be recognized on the national stage,” said Thillainadarajah, the company’s CEO, sitting in the boardroom last week.
“It sends a message that Atlantic Canada is growing some great companies, and we’re one of them.”
Thillainadarajah started Smart Skin in 2008 to commercialize technology developed at the University of New Brunswick that can detect pressure on a surface and chart it in real time on a computer or other device. After testing a few markets, the team hit on a product for the beverage industry three years ago that immediately drove sales.
Food and drink companies with huge production lines have problems regulating the flow of cans. If too many pack the lines at once, bottlenecks occur and the system must be halted and fixed, reducing productivity. By placing Smart Skin’s Quantifeel drones — fake cans lined with a pressure-sensitive skin — in the production line, managers can monitor pressure and motion in the lines and prevent bottlenecks.
Thillainadarajah said the company is targeting six firms (Coca-Cola, Pepsico and the four largest beer manufacturers) that have 1,500 plants around the world and account for 60 per cent of the global market. So far, four of these are customers for Smart Skin and have installed the product in a total of 45 plants, including some of the largest.
“That’s great for a company of our size, but we want to be in all 1,500 of the plants,” said Thillainadarajah.
One reason sales are improving is that Smart Skin this year hired away two senior sales executives — one in Europe and one in Chicago — from beverage companies. Thillainadarajah said these people have brought with them deep ties to the industry.
The company intends to develop more cloud-based software products that can analyze the reams of data collected through Quantifeel products.
“We are going through an evolution from this hardware sensor system when we entered the market to more of an Internet of things or data play.”
He said that in about five years, Smart Skin hopes to serve every segment of the packaging industry.
In late 2013, Smart Skin raised $3.9 million in venture capital in a round led by Rho Canada Ventures, Build Ventures and the GrowthWorks Atlantic Venture Fund. The round also included a second investment by the New Brunswick Innovation Foundation and contributions from angel investors.
Thillainadarajah said he began the latest stage of fundraising a few weeks ago and is already getting good feedback from potential investors. He said he hopes to close the funding in the next few months.