Newsroom Special Inquiry
FMA questions for Ray Avery company
A smart watch company co-founded by Sir Ray Avery and entrepreneur Alan Brannigan is seeking a further $1 million from investors by the month’s end, prompting the Financial Markets Authority to speak to the company, Jupl, about “potentially unhelpful” statements in its flyer.
Potential investors have been told of an opportunity to contribute a minimum of $20,000 towards a fundraising round totalling $1 million in convertible notes, with settlement due on August 31.
Jupl this year launched its wristwear-cum-personal alarm products without the smart medical functions envisioned when the business won a high tech award, access to up to $1 million government funding for research and development, and $10 million total investments from Spark and Bupa.
The watches, said to be brainchildren of Avery’s, were originally pitched as smart medic-alert bracelets that would record the wearer’s heart rate, temperature and other vital signs and track them using cloud-based software, automatically triggering an alert to friends or family if there was a worrying change in pattern.
Instead, Jupl (pronounced ‘JOO-pill’) launched a much simpler package of a 3G watch made by Samsung, with a personal alarm button a user can press to be connected by phone to a nominated friend, family member or call centre. The Samsung Gear watch detects motion and includes a heart rate sensor, though the company acknowledges the heart rate data is not medically accurate.
Bupa sold its shareholding earlier this month, largely to Waikato property developer Christopher Reeve.
The latest leaflet seeking funds for Jupl contains no revenue figures but cites the company’s strong financial model, recurring revenue stream and “strong leadership team including co-founders Sir Ray Avery and Alan Brannigan”.
It prominently features Spark’s early investment but does not mention Bupa.
The Financial Markets Authority confirmed it had identified concerns “with the overall quality of the flyer and potentially unhelpful statements in the disclaimer”. The market regulator said it was talking to Jupl because a fine-print disclaimer at the end of the flyer created an impression that Jupl could opt out of liability for what it was saying about its offer. Businesses dealing in financial products are legally barred from making false and misleading representations and unsubstantiated representations, the regulator noted to Newsroom.
A small-print disclaimer at the end of the flyer says: “Vigil Monitoring Limited makes no representations or warranties as to the accuracy, reliability or completeness of the information contained in this document.”
The FMA doesn’t class the short flyer as an investment offer, meaning Jupl isn’t required to abide by the disclosure rules for financial offers under the Financial Markets Conduct Act.
The fine-print also notes the document is only intended for distribution to wholesale investors. By law, an offer to the wider public would have to include certain detailed information to help people to assess the investment risk.
The flyer says funds raised on August 31 will be used to accelerate Jupl Mobile’s rollout to a “wider customer base” and as working capital to “see the company to sustainable break even”.
Launched in 2012, the biometric watch idea initially attracted accolades. But the promised functions proved a wrist too far in development.
Jupl’s CEO and co-founder with Avery, Alan Brannigan, told Newsroom earlier this month that practical issues had emerged with building in automatic alerts based on worrying changes in heart-rate because, for example, people wear watches with varying tightness.
“It's fair to say that we are not using the metrics as originally intended or claimed in the past,” Brannigan said. “We adjust based on feedback from users and a better understanding of how the device/platform performs and what the data sets tell us.”
“With regards to heart rate, we found that triggered alerts off patterns is difficult to control because you are so dependent on how the user wears the device (the tightness/looseness of the straps will change the heart rate signal recorded, for example).”
Brannigan pointed out that the Samsung Gear watches Jupl is using include a heart rate sensor, from which Jupl’s software can collect and analyse data, alongside movement and GPS-tracked location.
“Although not medically accurate, [the heart rate] does give the call response team another indicator as to the state of the user at the time. Also, given that the watch needs to be on the wrist to obtain the heart rate, this acts as a useful indicator when combined with movement for example, i.e. the watch is not moving and there is no heart rate so perhaps it's sitting on a table. Or the watch is not moving at a time when we would expect it to and there is a heart rate signal. This could suggest the person is lying still when not expected and hence could trigger an alert,” he said.
He didn’t clarify whether this information was currently being used to trigger alerts or ambulance call-outs.
Other watches, including the likes of Fitbits, include heart rate sensors. Ambulance services, such as St John, have devices which can be used to summon emergency help.
The project started out with a bang. In 2013 Vigil received a $5 million investment from Spark’s now-disbanded product development arm, Spark Ventures, as well as access to research and development grants totaling close to $1 million from the government’s tech-boosting agency, Callaghan Innovation.
It is not clear how much of that taxpayer money was called upon for the project's functional promise.
Aged care and retirement village company Bupa invested an additional $5 million in 2014, BusinessDesk reported. Grainne Moss of Bupa told Newshub at the time the technology would be a "disruptor" in the industry, and Bupa wanted to get on board early. Vigil also formed partnerships with St John and Plunket to explore its use in healthcare.
Also in 2014 Vigil won best pre-commercialisation company at Callaghan’s high tech awards, an award Callaghan says is for a business with a clearly-identified commercial advantage.
Callaghan’s announcement described the forthcoming product as Avery’s “brainchild”, an “intelligent medical alarm bracelet” that: “will monitor vital statistics, such as heart rate and temperature, and upload the data to an online storage system in real time. It will raise an alarm automatically if an adverse event, such as a fall or change in heart rate, is detected.”
In March 2016, the NZ Herald reported Vigil’s new technology “records a wearer's heart rate, temperature and other patient details from wireless devices, including smartwatches, before loading them to its database”.
Avery said at the time the technology would “disrupt the health insurance market by allowing companies to add value to customer policies through personalised biometric monitoring”. "[Companies] can make an insurance premium for you based on Vigil,” he said. At the time the company had successfully closed its first, $1 million, round of capital raising and was seeking a further $4 million to fund its global expansion programme.
In August 2017 Vigil Monitoring changed its name to Jupl, saying the company was “more than just monitoring” and encompassed connecting people by providing “personal biometric data in real time”. Brannigan added that the name change would allow Jupl to expand to new overseas markets using a consistent brand.
Today a Google search for Vigil Monitoring yields a website redirecting users to Jupl first, followed by the website of a Canadian listed company, Vigil Health Solutions, which offers “wireless emergency calling” and other monitoring and safety services to seniors living in assisted housing, including movement tracking of dementia sufferers. An investor statement says the Canadian Vigil is focused on the North American market.
Jupl’s August 2017 press release about the name change hinted it was targeting other personal protection markets as well as elderly and unwell people. In March 2018, Jupl announced a partnership focused on domestic violence victims with Australian company Survivor Watch, fronted by Australian swimming legend Dawn Fraser. Survivor Watch’s website allows people to donate to send alarmed watches to victims of domestic violence. Survivor Watch also markets its watches commercially to domestic violence victims, sole workers, travellers, the elderly and others; its ‘domestic violence survivors watch package’ was on sale this week for AUS$695. Jupl’s press material at the time quotes Avery saying Jupl’s technology “will impact positively on millions of peoples’ lives”.
Then, in May 2018, Jupl launched its own products for sale in Australia and New Zealand on its website, pitching them to solo and remote workers, elderly people living independently and others. Retailing at $899 for the watch and a six-month software and mobile data subscription package (a price the Jupl website says is reduced from $1099) the product says it allows “two-way communication” with the nominated friend, family member or colleague after an alert is triggered. A pack connecting the caller to a monitored 24/7 call centre costs $999 (down from $1200) including a six-month subscription.
Last month Avery demonstrated a watch to Newsroom. He pressed a button and a refined British robot voice said loudly that “an alarm had been triggered”, after which we heard Avery’s voicemail message (he had set the watch to phone his own mobile for demonstration purposes).
Another option Jupl has trialed with volunteers is using its GPS-enabled watches to locate dementia suffers, if their loved one can’t reach them by phoning the watch.
Things have changed since the start-up launched six years ago, and not just the decreased capability of the promised biometric watches.
Bupa confirmed that it has sold its 17 percent stake in Jupl, citing “different business priorities” and a desire to focus on aged care and retirement living. The change leaves a trust linked to property developer Christopher Reeve as Jupl’s second-largest shareholder with a 17 percent stake (after Spark, with 25 percent).
A former Morrinsville farmer with extensive property investments, Reeve now owns two-thirds of the shares previously owned by Bupa. Reeve told Newsroom he was looking beyond hard assets and buying stakes in digital companies, inspired by the success of Facebook, Google, Amazon and the like. “The internet changed everything. I’m looking around for ideas … It may or may not work out.”
Spark’s 2016 annual report said Spark had “assisted in the ongoing commercialisation of our investments in … Vigil Monitoring” (as Jupl was then called) but Spark declined to elaborate on its role beyond confirming that the telco had provided Jupl with an early investment, technical expertise and connectivity to the mobile network, and had a director on the board.
The third-biggest single shareholder is Vigil Nominees, of which Brannigan is a director and shareholder with a number of others, with 10 percent. Avery and entities solely or majority-owned by him and his wife Anna own a combined 17 percent. A company solely owned by Brannigan owns a further roughly six percent.
Recent years have seen a number of changes in directors for various reasons, with Avery being the only constant. The current directors are Avery, Spark’s Werder and Bede Ashby.
When Newsroom began making enquiries this month Jupl’s website listed its directors as Keith Oliver (chair), Avery, Spark’s Rod Snodgrass and, Norah Barlow, the past president of the NZ Retirement Village Association, among others. The page was updated this month.
The companies register shows Oliver stepped down in July, while another director, Morgan Hill, ceased being a director in June. Werder replaced Spark Ventures’ Rod Snodgrass as Spark’s board representative in May 2016, when Snodgrass left Spark. Bupa’s former chief executive Grainne Moss departed the Jupl board a month earlier, in April, just before she left Bupa to head Oranga Tamariki (leaving Jupl without a director from Bupa). Some time earlier, in November 2016, Barlow had also left her Jupl directorship. Barlow also left other directorships around the same time, as she became chief executive of Australia’s Estia Health. The former chair, Oliver, did not respond to a message from Newsroom.
Brannigan acknowledged the governance changes but said the company’s overall strategy hadn’t changed but rather “extended in scope” with its customer base. “Like many companies, our governance structure changes from time to time. We continue to gauge the response of our customers and the market in general and adjust accordingly.”
Avery has been in the public eye for his bid to raise $4 million to build thousands of low-cost, low-maintenance infant incubators to send to hospitals in the Pacific, Asia and elsewhere. A planned Live Aid-style concert at Eden Park is stalled after the park decided not to proceed.
When told Newsroom had been writing about various Avery ventures Brannigan praised his co-founder highly. “Sir Ray … has been instrumental in growing the business across a wide range of investors and stakeholders. We have enjoyed a very positive relationship,” he said.