After more than a year of funding the business himself, K4Connect co-founder Scott Moody announced today the first outside investors in the connected home startup he’s building to improve the lives of hundreds of millions of seniors and disabled people around the world.
But bigger than the $1.9 million now in K4’s bank account are the names and credentials of the investors funding what’s considered among Raleigh’s most anticipated startups.
Two investors bet big on Moody (top right) before. One is interested in social impact. Another in intellectual property. At least two have spent decades in the senior living industry—among them is an executive at the first company to sign a major deal with K4 and the guy who initiated its first beta tests in the Triangle. There’s also the venture arm of the nation’s second largest chain of home improvement stores.
While it helps that Moody sold his last company, AuthenTec, to Apple for $356 million, investors seem equally interested in his and co-founder Jonathan Gould’s (pictured top left) big vision of connecting thousands of household devices in a single app that offers elderly and disabled populations, along with senior living community operators, complete control over the home.
Says Stephen Morton, a Raleigh angel investor with more than 30 years in the senior living industry: “We’ve begun to take blood pressure and do medical administration management in an electronic manner, making sure that residents are taking pills and a myriad of other things, but K4Connect’s product takes that to the next level.”
So who are the investors, and what do they bring to the table?
Let’s start with the pair of funders Moody met while building AuthenTec in Melbourne, Fla. earlier this century. Silicon Valley-based Sierra Ventures and Stonehenge Growth Equity Partners of Florida were both investors in the startup that eventually provided Apple with its TouchID technology. Sierra is especially connected in California, Moody says, making introductions for Moody immediately after his pitch.
While he can’t disclose most of those connections, as some exciting conversations are in the works, one led to an investment by Better Ventures, a social impact investor of Oakland, Calif.
“Our whole focus on what we refer to as the client—the end user or resident—resonated with them,” Moody says. “It was more than just making money. It was literally the focus on making lives better.”
What Moody believes to be a nod toward the technology K4Connect has built is a personal investment by his intellectual property attorney, Chris Regan. Regan also helped AuthenTec secure more than 200 patents prior to its acquisition by Apple.
And to the industry opportunity, investments by Lowe’s Companies and several angels are affirming.
Though the Lowe’s investment is purely financial, Moody hopes there will be a retail opportunity when the timing is right to target seniors and people with disabilities living in their homes (additional products are planned). The venture arm of the Charlotte-based chain of stores has been active in the Triangle in recent months, making deals with SoloPro of Durham and Canopy of Raleigh. Lowe’s also has its own connected home product aimed toward homeowners. Called Iris, and considered to be the first platform created by a home retailer, it connects smart home products like lights, thermostats, baby and security monitors in a single app.
But Moody remains focused on senior living for now, leaning on the experience and connections of a pair of key angel investors. One is a founder of a Pennsylvania firm spending $1.4 million over the next two years to bring the startup’s K4 Community product into 10 senior living communities under construction across the state.
Each apartment will include a control unit that integrates the lights, television, thermostat, pedometers, sleep trackers and other connected appliances or devices into an app downloaded to the resident’s tablet or smartphone. The app also includes easy video calls to family and messaging to others in the community. The data collected by the app is sent to a dashboard monitored by the senior living community’s staff.
The vision, says Morton, is to use that data to predict illness or to respond quickly to falls or other irregular behavior. He’s especially excited to sync the data K4 will collect with a predictive analytics engine developed by another of Morton’s portfolio companies, Life2 of Palo Alto. A restlessness pad on a bed, for example, could monitor the number of times a resident gets up at night to go to the bathroom, helping to predict urinary tract infections or alerting a nurse to check in if the bathroom visit lasted too long.
Morton was connected to Moody through his son Arick Morton, a UNC and Harvard Business School graduate who’s also in the senior living industry and friends with a K4Connect employee. Morton was impressed by Moody’s background, and immediately saw the application in his industry.
Though Morton has started, led and sold senior living management companies, today he’s a consultant and angel investor. He’s helped K4 land a pair of pilots at Triangle communities that Morton says are “having huge success at this point.” He’s also an investor in Durham-based Simply Easier Payments.
Though Moody started with a plan to raise $1.25 million, he sees the larger round as evidence of the technology, team and market opportunity for K4Connect. It’s a big enough round to turn pilots into sales, in hopes of prepping for larger rounds in years to come.
Moody is a fan of using venture capital to build companies, after all, and his intent is to build a big one. That means lots of money, and fast.
“We want to support and serve as many people as we can, as fast as we can,” he says. “We can do that over decades or we can do that over years, and I think the sooner the better.”