Startup K4Connect has landed its first major contract – a $1.4 million deal to install its innovative technology in senior living facilities – and is seeking to raise its initial round of outside funding to grow its business.
The startup’s first product aims to use the convenience of the “Internet of Things” and its proprietary software to enrich the day-to-day lives of seniors in independent, assisted living and memory care facilities. At the same time, it will help managers of those facilities – or, as they’re known in the industry, communities – run them efficiently and effectively.
“It’s very under-served and it’s a significant market,” said CEO Scott Moody.
Moody co-founded K4Connect, which today has nine employees in downtown Raleigh, in late 2013 with fellow serial entrepreneur Jonathan Gould.
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Moody, an N.C. State University graduate, had returned to the Triangle after the company he co-founded in Florida, AuthenTec, was acquired by Apple for $356 million in 2012. AuthenTec created the fingerprint sensor technology used in Apple iPhones.
“I co-founded AuthenTec with a guy named Dale Setlack, who I often referred to – actually, most people referred to – as the smart guy,” Moody said. “Jonathan ... is actually the new smart guy.”
K4Connect has developed a software platform that can seamlessly connect numerous devices, regardless of their manufacturer and the wireless technology they use, and control them through a single application.
Signature Senior Living, which is gearing up to build assisted living and memory care communities in Pennsylvania, recently signed up as K4Connect’s first customer. Its contract calls for it to utilize K4Connect’s premier product, K4Community, in 10 new facilities.
Signature Senior is led by two veterans of the assisted living industry: Steven Vick, former president of industry giant Alterra Healthcare, and Triangle-based Stephen Morton, former president and chief operating officer of Southern Assisted Living in Chapel Hill. Southern Assisted was sold for $82.9 million in 2005.
Morton called K4Connect’s product, K4Community, “an amazing tool” that provides “a lifestyle enhancement” and is attractively priced.
“We want to be on the cutting edge of this,” Morton said. “The marketplace is demanding it.”
Morton said that he also likes the flexibility that K4Community offers because it is engineered to work with a wide array of devices and sensors and can keep pace with new devices as they hit the market.
K4Community offers a lengthy list of features that the company touts as adding up to a one-of-a-kind product.
Its many functions include enabling seniors to remotely manage their room temperature and turn lights off and on. They also can get reminders to take a pill or have a video chat with family members and others through K4Community apps.
Meanwhile, thanks to wireless connections with strategically placed sensors, staff is alerted when residents leave their room, which can be crucial information for Alzheimer’s patients. Personnel also is alerted when resident gets out of bed in the middle of the night and fail to return – possibly a sign that they’ve fallen and hurt themselves.
And if a resident sits up in bed in the middle of the night, the lights automatically come on – first in a pinkish hue, then gradually brightening – serving as a visual cue to remind residents they need to wait before standing up.
“Doctors tell their patients all the time, sit at the edge of the bed for 30 seconds, get your equilibrium … and then get out of bed,” Moody said.
Signature Senior’s first communities in Pennsylvania won’t be ready for occupancy for 12 months or so. In the meantime, Moody said, K4Connect recently began the first of two pilot programs in existing Triangle senior communities to determine “what we’re not doing right.”
“While I’m sure we have things to learn, the first one is going much better than I would have thought.” Moody said.
Moody, who has plowed about $600,000 of his own money into the business, also is seeking about $1 million from outside investors to aid the company’s growth.
“I do expect, longer-term, to raise much larger sums. This is a very big market for us,” said Moody. He noted that there are more than 22,000 senior living communities in the U.S. alone.
Under K4Connect’s original game plan, its first product using its technology platform was going to be K4Life, a home management system sold directly to elderly and disabled consumers.
Although K4Life is still in the works, Moody said that by marketing K4Community first the company will gain valuable experience “in a controlled, high-end environment” before tackling the home market, “which, as you can imagine, is a much more challenging environment.”