Temasek invests $40m in healthcare venture Hello

Visual from Sense Kickstarter page

Singapore state-fund Temasek Holdings has invested $40 million into healthcare startup Hello in a venture round, less than a year after the company, on Kickstarter, had raised $2.4 million for their Sense sleep monitor.

Hello produces a Sleep Pill, a device which clips onto a pillow to assess sleep quality through movement, sending data to a Sense bedside orb that measures bedroom conditions such as light, temperature and noise. It also doubles as an alarm clock.

The funding for Hello is significant, as it comes at a relatively early stage for this venture. This latest investment puts the valuation of Hello, which was launched by James Proud, a 2011 Thiel Fellow, in August 2012, at $250 million. Hello only recently completed shipping its first batch of products to almost 20,000 Kickstarter backers. So far, Hello has raised $52.9 million in funding.

Previous technology investments by Temasek include Alibaba, the Chinese ecommerce group, and Snapdeal, the Indian online retailer. In 2011, Northbrooks Investments, a Temasek subsidiary, joined a $30 million Series C round for PCH International, which provides custom manufacturing and supply chain services to technology firms.

Having access to investors with considerable capital reserves like Temasek could serve to provide a long-term advantage to Hello. With most Silicon Valley ventures focused on software and internet services, manufacturing and distributing consumer electronics is more capital intensive and requires more funding to sustain a runway.

Also Read: SingTel Innov8 & 500 Startups funded Ninja Blocks goes bust

This investment comes amidst Fitbit’s IPO and a drive into fitness tracking by technology behemoths like Apple and Google. A Fortune article has mentioned a potential market cap of $3.89 billion, while a Seeking Alpha report projected a possible market capitalisation of $20 billion post-IPO. For comparison, Crunchbase data shows that Fitbit raised $66 million from Series A to Series D.

Healthcare gadgets are providing a highly profitable domain, as exemplified by Fitbit, which had a gross margin of 50 percent in 2014. This came from 10.9 million devices being sold, generating $745 million in sales for the company.

With this in mind, the Temasek deal signals growing investor interest in healthcare technologies globally, and an area that investors may want to peruse alongside the Internet of Things (IoT), which healthcare technologies overlap with considerably.

IoT is forecast to see tremendous growth in the 2015-2019 periodThe  IoT market in manufacturing operations alone will is expected to grow from $42.2 billion in 2013 to $98.8 billion in 2018, a five-year growth rate of 18.6%

According to a Financial Times report, Proud founded and sold Giglocator, a prior venture, for close to $1 million in 2012. After this exit, he used the proceeds to found Hello. After plugging into Peter Thiel’s network, Hello raised $10.5m in 2014, as well as adding influential Silicon Valley executives to its roster as advisors or directors. For instance, Dan Rose, Facebook’s vice-president of partnerships, joined Hello’s board of directors in February 2015.

This investment comes as Hello seeks to expand into Asia, where most consumer electronics are produced. The funding is required, as Hello scales up and positions itself to compete with larger health-tracking technology companies like Fitbit and Jawbone.

Temasek declined to comment on Hello, but said it was active in the tech sector through funds managing early stage and venture capital investments (e.g. Vertex Ventures), and through its direct holdings. In an official statement, Temasek said, “We see opportunities in the tech sector which cater to our investment themes, particularly those around the growth of middle income populations and their demand for consumer and technology products.”

Also Read: Temasek picks up over 20% stake Univar for $500m

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.