CloudTag Inc (LON:CTAG) Chief Executive Officer Amit Ben-Haim caught up with DirectorsTalk for an exclusive interview to provide a company background and to discuss their plans in the run up to their 2016 product launch at CES
Q1: You have quite an extensive background in technology companies, could you tell us a bit about yourself and these companies?
A1: If I pick up on 2 of my companies that I co-founded, the first was Biosense which is a medical device company. I co-founded it then became the CEO and within 36 months sold it to Johnson and Johnson. During that period of time of course, one had to build up the product, had to have all the abilities to get all the scientific discipline and get them in one go in order to get a product from a very clear invention. We obviously had to deal with the regulatory, it is a medical device so we had the FDA for the United States, the CE mark for the European community, PMDA for Japan, and those were our three biggest markets. We then had to deal with the marketing and sales, it is a very difficult market to enter. In between all of that, I had to do the fundraising and investors-relation and then we got to the level of enticing Johnson and Johnson to come to the negotiating table, going through the whole merger and acquisition proposal and this was all done within 36 months and products were already in the market. So this is one kind of experience and the medical device there is a very clear indication towards CloudTag that comes from a medical device in the ECG. The other company that is also very close to CloudTag, in a different manner, is Odigo which is an instant messaging base for the BBM. This company took 16 months from start to sale and was very rich in algorithms, software development, user interface of course, the security level, obviously encrypting the data and again, fundraising and investors-relations and engaging Converse Communication which is a NASDAQ listed company. So the skill sets are very clear there in the ability to drive a start-up company, enhance all the scientific disciplines, time to market is always critical in these companies especially in CloudTag whereby this market is exploding and the ability to be hands-on with a very clear definition to where we want to drive so I think this is the preamble why I became close to CloudTag and why CloudTag became an interest to me.
Q2: Moving on to CloudTag, what does the company do?
A2: Primarily, we are in the wearable device for health and fitness market. Our market aim is weight loss which is the largest part of the health and fitness markets. The majority are female users and they have very specific needs for specific reasons to follow a regime and we are here to provide for them their daily dashboards for health and obviously achieving their goals.
Q3: Is this a worldwide audience?
A3: Indeed. Although having said that, the United States is one big mass market, UK and Germany represent 80% of the wearable in Europe so I think as a start-up, we should scale down our ambitions to conquer the world in one go but I think those markets are the most important markets for us going forward.
Q4: There seems to be quite a bit of competition out there already, what makes CloudTag any different from other companies in the market?
A4: It is a very dynamic market. I think it’s becoming a blue chip market with the entrance of Apple with the Apple watch. Now a lot of companies and investment communities and institutions will start looking at it as a structured market. Recently, FitBit announced they are planning on doing an IPO so I think in that respect, the market is becoming mature. There would be a level of consolidation and again, the two elements here are definitely the product definition and the unique selling point and what we have is a very specific one. We’ve been targeting the graduates on the first round of users of wearables whereby they were excited about the connected fitness, take off the data on the fly but realising later on that the data they receive may means the calories that they’ve burned or the steps that they’ve done is not really accurate and because of that they could not assume certain things. Our first unique selling point is that we are coming from an ECG background so we are actually taking the heart rate from the chest as opposed to the wrist so our quality of data is fair superior to anyone else. We’re then adding on specific algorithm from a partner of ours, Imec, which actually gets us as close as possible to the real calories burned so that’s one unique selling point. The second one is not less important, we are reclaiming the reality-check for our users. We will work alongside their targets so they will set up their targets and we will make sure that they get to that target by advising them to change their exercises, support them with the right type of diet so we’re hitting the target from two different prongs; one is the nutrition side, the other one is the physical side. So I think we will carve a place in the market, there’s no question about that. It’s an exploding market, 119% gross of units shipped from 2012 to 2018. We’re taking about 2010 million units in 2018 representing 30 billion in revenue so I think this is a vast market. Again, the other unique selling point with us is that not many companies in the world have a device, the vast majority are app providers only so from that point of view, we have the device element, we have the user interface through the app and then we have the cloud whereby they can actually work around their calculations; they will see different graphs and different presentations, so that’s a much higher entry barrier.
Q5: Over the past few months you’ve had a fair bit of news, could you provide us with a bit of a recap for investors?
A5: I think if anyone looks at the list of our published RNS from the beginning of February to date, we have been keeping the market abreast with anything happening. By now on average it’s almost every 10 days that there’s an announcement from the company, we are very clear about our trajectory, very clear about catching and making sure that on 6th January 2016, we’re going to launch the product at the Consumer Electronics Show (CES). To do that we’ve had to harness all the technologies into the house and we have revealed that Imec, the research institution who specialise in nano technology and wearables, have been working for us and with us for the last 2 years. Then we have a long-standing equity partner, Precious Blue Dot, that does all the user interface, something that they have grown to do the job the best possible way inside this gaming market, hence Microsoft purchasing the same partners previous called Rare. We have now established our own research and performance laboratory just outside of London where we have our own machinery there, jogging machine and other gym equipment, we have ECG machinery and other simulators so we are on the go, keep on evaluating our product and keep on developing it and most importantly, trying to build the IP in-house.
Q6: What’s on the horizon for CloudTag? We know 2016 is your target but what can we expect in between?
A6: Obviously we have announced that we are going to start our beta trials in the next month and it’ll be over a period of a few months because we keep on bringing new iterations. This is a very closed loop situation, a very much ‘close to our chest’ operation, leading all the way to end of Autumn to pre-mass production orders, getting us ready to the market. I would say by quarter 4, we will be engaging with retailers, both the bricks and mortar online and through our own online operation to start building up some pre-launch orders. We have a very tight timetable and we have an amazing dedicated team. The team is growing almost every other week we are adding more people, quite a lot into the technical side, the software side. I think this is an exciting period of time for us but I think the proof obviously is on the 6th January when the product is ready to be launched at CES.
