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24 November 2017

StartToday considers whether StretchSense fits

StartToday has taken an option on sensor manufacturer StretchSense after using the spinout’s technology for its body measurement device.

Author: Callum Cyrus, reporter

StretchSense, a New Zealand-based wearable sensor manufacturer spun out from University of Auckland, revealed yesterday that it had agreed a call option to be acquired by e-commerce portal StartToday.

StartToday already owns a 39.9% stake in the spinout and would pay $72m for the remaining shares.

The option, which costs $20m, is valid until September 2018 pending regulatory approval from the New Zealand Overseas Investment Office. The agreement values StretchSense at approximately $120m.

StretchSense manufactures soft, malleable sensors to attach to items of apparel. The sensors are marketed to smart apparel vendors as a business-to-business service, and StartToday used the technology to design its body measure device Zozosuit for the Japanese market.

StretchSense was founded in 2012 under the tutelage of three researchers from Auckland Bioengineering Institute's Biomimetics Laboratory – Iain Anderson, Todd Gisby and Ben O'Brien, who is now chief executive.

The spinout's two Auckland offices would remain open following the acquisition, and StartToday would make resources available for further expansion. 

The acquisition would provide an exit for Auckland UniServices, the university's tech transfer arm, as well as New Zealand state-owned VC firm New Zealand Venture Investment Fund (NZVIF), which backed StretchSense in 2015.

StartToday had provided StretchSense with an undisclosed sum of series A capital in July 2016, after the spinout raised a seed round of undisclosed size from NZVIF and angel syndicate Flying Kiwi Angels in 2015. 

Individual investor Ralf Muller has also backed the spinout, though details could not be ascertained.

O'Brien said: "This deal with StartToday is a great sign for New Zealand's technology ecosystem.

"It proves it is possible for a Kiwi technology company to build itself up from essentially nothing into a world-class operation capable of competing on the global stage.

"Our relationship with StartToday began because of our technology, but it is the value of our people and Kiwi expertise that have led us to this point, as well as our compatibility with StartToday's fantastic company culture." 

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