A surgeon attaches an Opum Bluetooth sensor to a patient's knee brace. The firm went into receivership last week. Photo / Supplied
A surgeon attaches an Opum Bluetooth sensor to a patient's knee brace. The firm went into receivership last week. Photo / Supplied
An Auckland startup that received Government grants and public and private sector venture capital to develop artificial intelligence technology for knee injury recovery and other ailments has fallen into receivership.
The firm was founded by Andrew McDaid in 2016 following his research as an Associate Professor at Auckland University andhas since undertaken two capital raisings to fund its “Digital Knee” platform.
But last Wednesday Tony Maginness and Jared Booth of Baker Tilly Staples Rodway were appointed receivers by Australian-based investors, including Transocean Securities, a Sydney-based corporate advisory and asset development firm.
McDaid said in a statement to the Herald that the firm was “forced into receivership” by a group of its foreign shareholders.
“The business is now being funded through an accelerated sale process - we are continuing to operate, including delivering healthcare services to our patients and executing on our commitments to clinic customers,” McDaid said.
Opum was spun out of research carried out by its CEO and founder Andrew McDaid at Auckland University. McDaid is also a research associate with AUT's Sports Performance Research Institute. Photo / File
Transocean is listed as Opum’s second largest shareholder with a 13.08 per cent stake and a recent Companies Office change saw its managing director James Henderson appointed as an Opum director. The previous board, including McDaid, all resigned in April.
Early Opum investors include Aspire NZ Seed Fund, part of the Government’s venture capital funding vehicle NZ Growth Capital Partners (NZGCP), Tauranga-based WNT Ventures, which invested just over $1.6m in both funding rounds, and angel investor Brent Ogilve.
The University of Auckland’s commercialisation arm, Uniservices, has an 8.86 per cent stake.
Another investor was the Booster Innovation fund, which is managed by NZX-listed Booster Investment Management and includes KiwiSaver investment funds.
Booster invested $250,000 in Opum following the firm’s December 2022 capital raise. The fund’s product disclosure statement was updated in March this year, flagging a potential devaluation, which it described as non-material.
“Any decrease in the value of this investment will be immaterial to the fund as a whole and reflected in the unit price,” it said in a note about Opum.
Companies Office records reveal a number of other Opum shareholders from New Zealand, Australia, the US and the UK.
Rob Everett, CEO of Government VC firm NZGCP. Photo / Supplied
Rob Everett, chief executive of NZGCP, said the Crown’s exposure was relatively small.
“We’re aware of Opum going into receivership. We had some exposure (approx. 4 per cent of the company, around $225,000 total investment). We first invested in 2019 and again subsequently,” he told the Herald.
Everett said Aspire invests in early-stage companies developing innovative technology.
“It goes with the territory that very few of those companies go on to significant long-term success and that many fall by the wayside.
“We’re sorry to see any of our investee companies in receivership or similar situations but with a larger historical portfolio than most NZ funds operating in this space, we do see a number of companies dropping off every year.”
The Herald reported in October 2021 how Opum was receiving financial backing as it entered the commercial phase.
A patient using Opum's smartphone app, which connects to its sensor. Photo / File
The company had developed a sensor that clips to a knee brace or sleeve, feeding data about a patient’s movements to a smartphone app - from when they’re actually exercising to detecting a problem with their gait when they’re going for a regular walk.
Opum’s AI platform then crunches the data, with its algorithms producing reports that can help an orthopaedic surgeon or physiotherapist come up with the best treatment and more personalised care.
Aside from venture capital funding, Opum also received a series of grants from Callaghan Innovation ranging from student salaries to project grants. All up the firm received $651,798 in Callaghan grants since 2019.
Receivers Maginness and Booth said they would look to sell the business.
“We anticipate significant interest in the company, which currently retains all the existing staff, and which is actively conducting a successful clinical trial with the #1 ranked US rehabilitation hospital which has validated the clinical value of the platform,” said Maginness.
McDaid in his statement said Opum’s platform had FDA clearance and a profitable business model based on a proven US reimbursement strategy.
“Opum is revenue generating with early customers and global channel partners that will drive the growth phase of the business. These major partnerships are forecast to take Opum through to profitability as well as expansion into new products and business models in other market segments such as the Veterans Affairs hospital network.
“Opum is addressing a major commercial opportunity in remote orthopedic data and has significant IP assets including a patent portfolio, trademarks, proprietary software platform and AI/ML algorithms. Opum has also recently developed the first digital twin clinical data standard for the knee joint and is exploring data monetization strategies and business models.”
