Intelicare set to IPO smart health care tech
At a time when health care has never been more prominent in the minds of many and home care solutions are more urgently sought, Intelicare’s artificial intelligence powered, in-home monitoring system for the sick and elderly is set to come into sharp focus. As the company seeks to ride on the coat tails of an ageing baby boomer population, its upcoming public listing on the ASX would seem exquisitely timed with the elderly confined to quarters right now due to the Coronavirus and largely quarantined from their loved ones.
The system uses the “internet of things”, a series of strategically placed in-home third party sensors and an artificial intelligence driven software platform to monitor and learn in-home behavioural patterns of elderly, sick and frail individuals.
The system gets to know its client intimately by learning what normal routines look like and it then monitors for any deviation from ordinary patterns or anomalies.
These might include a lack of movement for extended periods of time, extended duration stays in one room and it can even pick up on significant increases in bathroom visits which can sometimes be symptomatic of underlying health conditions.
There are two types of sensors that are generally available off the shelf from third parties that Intelicare integrates into its smart platform. One is a movement sensor and the other is a power sensor.
The systems’ power sensing ability can tell if the fridge door has not been opened or if the kettle has not been used, for example. It can even detect if the oven has remained on for extended periods of time.
Family members and loved ones can stay connected to their sick or elderly relatives by way of a smart APP on their phones that will report and alert them if the system detects any significant departures from normal behaviour.
The company’s smart home system is set to ride on the tailwind of the ageing baby boomer population and will fill a gaping hole in the aged care market with Australians over 65 projected to rise by a whopping 1.6M between 2017 and 2030.
Revenue from the Australian aged care industry currently sits at around $21.5B, according to Intelicare who also cites an ABS report that shows Government aged care expenditure alone will reach $24B between 2021 and 2022.
Interestingly, despite an ageing population that is trending towards in-home care, the in-home care market is curiously under-serviced.
16,000 elderly people died while on the wait list for a Government funded in-home care package in 2017/18 and according to Intelicare, there is currently over 120,000 people on the home care wait list, a backlog that would cost in the order of $2.5B to clear.
Intelicare’s system comes as a once-off buy for the hardware with a rolling “software as a service” annuity style revenue stream kicking in at the back-end for Intelicare.
Given the curious but intimate artificial learning relationship that is built up over time between the resident and the system, it is easy to foresee a scenario whereby clients become what is known as “sticky”.
The allure of switching to some alternative method of monitoring that has not learnt the behavioural nuances of the resident over time should therefore be relatively low.
Intelicare has two product offerings – “Intelicare Pro” and “Intelicare Home”. The Pro version has a multi-client software interface and is designed to be used by home care service providers such as Government health departments and private operators.
It is also targeted at residential aged care homes where its efficiencies can easily be put to work by nursing staff that are seeking to monitor multiple patients at any one time.
Since Intelicare rolled out its technology in the first quarter of this year, it has already pulled in over $500K in revenue and completed three commercial pilots with the WA Country Health Service, Swan Care and the Department of Community Services.
The Pro version now boasts five locked-in B2B clients and growing.
The Pro version’s routes to its market are significant, with an estimated 192,000 B2B users in WA alone with Intelicare suggesting that to break-even it would only need to tap a miniscule part of this market.
Intelicare’s Home version is eventually envisaged to be an “off the shelf” DIY in-home care product, sold in stores departmental, hardware and electronics stores.
Buyers would simply purchase the sensors, install them in the house, access the APP and set up an ongoing monitoring account. Multiple family members can be linked into the same set of sensors. Whilst Intelicare appears to have its particular marketplace pretty much to itself, it is the wearable pendant market that the company is seeking to muscle into.
Monitored pendants or alarms for example, are completely reliant on being worn, charged and/or being activated by the user and there is increasing evidence that they are not being adequately used.
Consumer advocate, Choice said: “We will no longer recommend any personal alarms”… “complaints occurred across a number of brands and models, which we feel points to problems with the personal alarm industry as a whole.”
Software as a service or “SaaS” businesses are rapidly advancing and growing in popularity in the market given they have the ability to deliver regular, growing and dependable “annuity” style revenues that tend to elude businesses that have to rely on day-to-day discretionary custom to get by.
It is all about the sales efforts however, when it comes to SaaS style businesses - and there is no substitute for a well-funded army of sales people who are prepared to expend real shoe leather to continually grow the book.
With a goal of raising $5.5M at 20c a share, Intelicare has an opportunity to invest heavily in a sales army from the get-go and from there it is all about getting to breakeven and then onto profitability before hitting exponential profitability when all costs are covered.
Intelicare is headed up by Jason Waller, the former MD of ASX-listed digital mapping business, Spookfish. He guided that company to a $136M takeover at more than twice the company’s market cap when he took the helm. So this isn’t Waller’s first rodeo.
Adroit corporate finance player, Jason Skinner and his team of young but sharp stablemates at JP Equity in Nedlands will act as lead manager for the Intelicare IPO.
Whilst traditional mining and other IPO’s that were slated for listing in this quarter are being pulled at a rapid rate of knots due to the Coronavirus, Intelicare’s in-home monitoring solution just might be the right product at the right time with Waller reporting solid early interest in the IPO.
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