StretchSense re-enters US through acquisition

StretchSense chief executive Ben O'Brien. Photo / File

Futuristic textile company StretchSense is back in the US market after buying animation studio MoCapNow.

Last September, the Kiwi company was purchased out of administration by the newly-formed Sensor Holdings, which is majority-owned by venture capital fund Global from Day One (GD1).

MoCapNow is a two-man motion capture studio based in Seattle, consisting of visual effects editors Ander Bergstorm and CJ Markham.

GD1 senior investment manager John Kells confirmed the takeover involved Sensor Holdings issuing shares to the pair but would not be drawn on specifics.

"The deal offers us the capability to have a presence in the US - where our major customers are - and gives us access to people that we know very well and gives us existing support and feedback," said Kells, adding that MoCapNow has previously been a customer and "influencer" for StretchSense.

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The studio was using StretchSense's first proprietary product, a motion capture glove that retails for US$5,000 ($8333) online.

Kells said the acquisition gives StretchSense better access to the market, "especially during the time where it is impossible [due to Covid-19]. We can Zoom and use remote software options but there is no substitute for local presence."

He said StretchSense is now focused on three verticals: motion capture as the MoCapNow deal illustrates; industry "extended reality" or XR, for example using its gloves to train for surgeons; and gaming.

Kells wouldn't be drawn on the purchase price for StretchSense, but said it was an attractive company because it makes its own sensors and had a significant headstart on its competitors.

The Penrose-based company has had its share of ups and downs, having employed as many as 180 people in 2018, when it also had sales staff in the US.

The company was forced to lay off the bulk of its staff two years ago when Japanese e-commerce firm ZoZo reneged on a takeover deal.

Kells said there were 13 staff at the time of administration last year, which has since expanded to 20. The liquidators report into the business dated September 2019 said the Bank of New Zealand was owed $2.5 million while its former part-owner, ZoZo was owed $11.3m.

StretchSense's founders are still involved in the business. Ben O'Brien and Todd Gisby each own 10 per cent, while Iain Anderson has a 5 per cent share under the new ownership.

Chief executive O'Brien said it was a relief to have a local presence in the US amid Covid-19, but won't be specific about revenue and sales.

"What we were doing before is making sensor technology and selling it to a large range of applications and we are still doing that. The advantage of doing that is you turn over a whole lot of stones that you didn't even know were there."

However, he said the disadvantage with that approach, "is that it is somebody else's product so somebody else is making the calls about what's going to proceed and when."

"The single difference between what we are doing now and the last seven years is having a full user experience and deciding when and how we go to market," O'Brien said.