The Labour Government in the UK has a Kiwi software firm at the heart of its retail crime crackdown. Auckland medtech startup Formus Labs is about to crack the US market open - and be big in Japan. A conference hears that medtech is becoming a multibillion-dollar earner for NZ.
Updated
UK Govt says more retailers should use Kiwi crime-fighting software firm Auror, medtech Formus Labs nears commercial launch in the US - Tech Insider
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Kiwi crime-fighting software firm Auror uses templates to speed up and standardise retail crime reporting. Image / Getty Creative
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Cooper said she wanted more UK retailers to use Auror’s software, which aims to make it easier for retailers to report offences to police, including photos, and snippets of video taken on their cameras.
The Home Secretary is urging police to make greater use of facial recognition technology and is behind the bill, currently winding its way through the UK Parliament.
The controversial bill makes it an offence to conceal your identity from CCTV under certain circumstances (including protests), introduces the new offence of assaulting a retail worker and makes theft from a shop trial-able, regardless of the value of the goods (from a £200 [$450] threshold today).
Stores including M&S, Morrisons, Boots, Tesco, Primark, and Greggs are submitting CCTV, photos and personal data on all their repeat shoplifters to Auror’s platform, which is shared with police.
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Cooper endorsed the Kiwi software after receiving a briefing from Boots, according to the UK’s Telegraph.
Additionally, two Auror executives were recently invited to 10 Downing Street: UK and Europe vice president Mark Gleeson (a former tactical commander with the Royal Air Force) and UK director of law enforcement and partnerships Paul Fagg (who began his career as a police constable for London’s Metro Police and rose to become a police inspector with the National Business Crime Centre before joining Auror last year).
Fagg said his firm’s crime intelligence platform enabled retailers to record everything that happens in their stores to tackle the “huge under-reporting issue”.
“Police have access to Auror so that incidents they did not see before are now visible for them,” he said, adding that this enabled police and retailers to identify prolific offenders with CCTV and photographic evidence.
The shared data enables all the stores and police to “join the dots” to identify prolific offenders, gather evidence for prosecutions and provide security staff on the shop doors with photo watchlists to bar entry, Fagg said.
Auror says its system is used by 98% of retailers in NZ and 75% in Australia.
In November last year, the Kiwi firm raised $82m at a $500m valuation, with the funds earmarked, in part, for a push to further expand in the US.
The raise was led by two new investors: Axon Enterprise (formerly Taser International) and W23, a venture fund backed by five retailers including Tesco and Woolworths.
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Nasdaq-listed Axon – which has a US$70 billion ($115b) market cap – invented the Taser in the 1970s. In the 2000s it expanded into bodycams, then computer-aided dispatch software and a cloud-based digital evidence platform. The firm was already an Auror technology partner.
Going harder with Taser maker in the US
On June 4, Axon and Auror announced a new Retail Crime Hub, which they billed as “unlocking a more efficient way for North American law enforcement agencies to collaborate with retailers and stop crime in our communities”.
Auror already had a substantial beachhead in the US through anchor customer Walmart, founder Phil Thomson said.
The new Retail Crime Hub should help it extend its reach. Thomson said a key issue was that while NZ has a single law enforcement authority (the police) dealing with retail crime, in the US it varied not just by state but by locality with some 18,000 agencies at the country level.
Auror is pitched as a conduit to link them together for intel on retail crimes that fly well under the radar of national enforcement agencies.
The privacy debate
The fast-growing Auror has drawn a degree of privacy flak on both sides of the Tasman with a system that uses digital images which can misidentify people.
But the firm has kept its nose clean with our Privacy Commissioner.
Thomson emphasises that Auror doesn’t operate any security cameras and does not offer live facial recognition.
Privacy Commissioner Michael Webster recently gave facial recognition trials by our two major supermarket chains his cautious tick of approval.
And Justice Minister Paul Goldsmith says the option of having a centralised system of facial recognition is something he expects officials to consider.
“We [Auror] acknowledge the calls from groups like Retail NZ, the UK Home Secretary, and NZ Government, for the use of technology such as facial recognition technology [FRT] in the retail sector,” Thomson told Tech Insider earlier today.
“We support the responsible use of FRT by retailers to protect workers, shoppers and communities from violence and harm.”
Thomson knows the legal and philosophical ins-and-outs (he’s a former intellectual property lawyer with Simpson Grierson and an ex-board member of the public-interest focused NZ Council of Legal Education).
But he says his support for FRT is based on what’s happening every day in the real world.
“With retail violence continuing to rise, it’s a no-brainer for retailers to explore how this technology [FRT] can be responsibly used in their stores. It’s already used in everyday environments such as airports, hotels and casinos,” he says.
“Due to the increase in violence and crime in stores, in my view, it’s now not a matter of ‘if’ or ‘when’ - it’s about ‘how’ this can be deployed in the best way possible, protecting communities while also protecting privacy.
“Retail crime isn’t victimless - it’s violence, it’s assault, and it’s organised. We know one in 10 events involve violence or use of a weapon. Ten % of top repeat offenders are responsible for more than 60% of the crime in Kiwi stores. Furthermore, repeat offenders are up to four times more likely to be violent.”
Hip to be AI: Formus Labs poised for US commercial launch
Auckland-based med-tech Formus Labs will commercially launch in the key US market in a couple of months, founder and chief executive Dr Ju Zhang says.
The launch follows the start-up gaining US Food and Drug Administration approval in December for its AI-powered, 3D software for planning orthopaedic surgeries - specifically hip replacements, with its FDA green light.
Formus is lining up deals with the likes of hospital chains and insurance firms.
Zhang says his firm has pilots already under way with several “tier one” and “tier two” players - with revenue above US$1 billion ($1.65b) or in the hundreds of millions, respectively.
The start-up already has a close relationship with one of the biggest names in the field - Indiana-based Zimmer Biomet, with whom it’s partnered with in Australia since 2019.
Zhang says with major commercial revenue just months away, there are no plans for another sizeable raise, though it’s possible Formus will stage a small round for bridging. (Its last major raise was US$5m ($8.25m) in early in a round led by Global From Day 1 and supported by Icehouse Ventures, Pacific Channel, Flying Kiwis and Punakaiki Fund).
The FDA approval was a breakthrough moment as many regulators around the world take their lead from the US agency, Zhang says.
Japan - a major market for orthopaedic technology - will be next cab-off-the-rank for the multi-Hi-Tech Awards winner.
Australia is also a major market. Zhang says Formus consults closely with several orthopaedic surgeons in NZ but commercial maths means the primary focus has been across the Tasman and in North America.
Regardless, he and his crew of 16 staff are based in Auckland, which he anticipated will remain the hub of the firm’s R&D.
There’s a lot that’s high-tech about joint replacement surgery these days. But there’s also a lot of drilling, scraping, sawing and hammering.
“In some ways, it’s a lot like carpentry,” Zhang says.
Formus Lab’s software helps a surgeon more quickly and accurately prepare, and pick the right size joint replacement from what can run into hundreds of options. Currently one in 10 operations have to be redone and one in five have some degree of post-op complication.
Medtech on the rise
At a HealthTech Week event in Auckland last week, the audience heard that New Zealand’s MedTech sector currently generates around $2.6b in annual revenue and is projected to reach $3.8b by 2028, a compound annual growth rate of 7.8% since 2018, according to Technology Investment Network, TIN200 stats.
“It’s still dominated by the big fish; the likes of F&P Healthcare,” Callaghan Innovation HealthTech head Andrew Clews told Tech Insider.
“But there is a second tier of companies coming through now that we’re supporting.”
Clews says venture capital money is coming on board and the number of start-ups is increasing - thanks in part to a tight-knit ecosystem.
Formus Labs is one of several medtechs spun out of Auckland University’s Bioengineering Institute, for example, he said.
Others include Kitea Health, the maker of a world-first wireless implant for measuring brain pressure, Toku Eyes and Alimetry.
The event was arranged by Te Tītoki Mataora, funded by Auckland University and MBIE and Callaghan Innovation’s HealthTech Activator.
Both programmes offer various forms of support for medtech start-ups, although Callaghan Innovation is being disestablished.
With most staff already laid off, the HealthTech Activator has funding to last through until a new advanced research agency is created around this time next year.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
