Provided exclusively by Mergermarket, an Acuris Company
WearSafe Labs, the Hartford, Connecticut-based wearable technology maker, has engaged in discussions with interested suitors and would consider a buyout in the first quarter of next year, co-founder and CEO David Benoit told this news service.
The privately held company has raised USD 4m to date and is in the process of finalizing a USD 7m Series A round with participation from New York City-area venture capitalists and high-net-worth individuals, he said.
WearSafe Labs expects to finish the year with about USD 5.5m in annual revenue and to reach profitability early next year. Around that time, the company also expects to hit subscriber growth goals that would make it a good time to engage in potential buyout talks, the executive said.
Using a Software-as-a-service (SaaS) business model, WearSafe sells personal safety app that integrates with a wearable button that will send real-time emergency information to a user’s close family or friends. Subscriptions cost USD 5 per month and the button is provided at no cost.
Former Goldman Sachs NYSE:GS] partner Ravi Singh invested USD 3m in WearSafe and joined its board in 2015. The board includes members from the national security community and Fortress Investment Group [NYSE:FIG], Benoit said, adding that the company has leveraged their experience and connections for advisory help.
Nevertheless, the company still welcomes approaches from advisers bringing potential buyers or strategic partners, he said.
WearSafe has 24 employees and continues to make hires. The company is most interested in a deal that could allow it to rapidly and competently scale up in the US and globally, the co-founder said.
While a full strategic buyout would potentially offer WearSafe the greatest scalability, it may also opt for one or more minority equity deals with strategic partners at the beginning of next year, according to the CEO.
Benoit said much of the company’s suitor interest has come from overseas – Israel in particular – and WearSafe believes its technology would find high demand and applicability in South America.
WearSafe recently signed a non-disclosure agreement with a media firm interested in investing in the company and offering preferential marketing terms, but most talks with interested parties have remained informal, he said.
Once activated, the WearSafe app opens an active timeline that sends the user’s current location, medical conditions and a 60-second clip of audio from the minute before the button was pressed.
Using a shareable link, the user’s friends and family can interact with the user and also invite first responders to the timeline to help evaluate the situation and approach the scene.
This flexible suite of services makes it useful for situations ranging from medical emergencies and car accidents to kidnappings and other instances where using a phone might escalate the situation or be impossible, the CEO noted.
The button can be integrated with Android, Apple, Fitbit and Garmin wearable products. The company is now working to integrate its software into home devices such as Amazon’s [NASDAQ:AMZN] Echo, Google [NASDAQ:GOOGL] Home and Microsoft’s [NASDAQ:MSFT] Cortana, he said.
WearSafe sells through its website as well as Best Buy [NYSE:BBY], Costco [NASDAQ:COST] and independent running specialty shops as it is particularly popular among mothers and female runners, he said, adding that the company is also negotiating wholesale agreements with Dick’s Sporting Goods [NYSE:DKS] and other retailers.
Wiggin and Dana serves as WearSafe’s corporate law firm. Simione Macca & Larrow is its outside accountant.
by Nicholas Clayton in New York
As seen in the mergermarket, an Acuris company, newsletter on 10/07/2017