Brisbane-based technology company VALD has made big gains in the lucrative elite sports sector in the US and Europe, supported by multibillion-dollar budgets from the likes of the English Premier League, NBA and NFL looking to get the best performance from their players.
However, the human-measurements software developer is starting to hit its stride in allied health where the company sees its biggest potential as a global player.
In the last financial year, more than a quarter of VALD’s sales came from the health sector, largely from physiotherapy clinics and hospitals.
VALD, which was founded by Laurie Malone and Sam James who were named winners of the Technology category at this year’s Brisbane Young Entrepreneur Awards, produces a suite of devices that measure physical performance at a musculoskeletal level. While VALD develops its own hardware, the company is largely a software company built on a software-as-a-service (SaaS) model.
“In Australia, allied health is already the dominant market for us, and we expect that trend to continue overseas,” James tells Business News Australia.
“In the US, where there is so much college sport, high school sport and professional sport, we do very well in elite sport which probably makes our growth in health appear not as strong as it actually is.
“We initially took a bit of a gamble on elite sport because it is high profile, and they have the budgets to seek out cutting-edge technology. But we’ve also put a lot of time and effort in tailoring our business to the health market and it seems to be paying off. It’s just taken a while to broaden our product offering to suit allied health practitioners.”
About half of the company’s revenue is generated in the US with Australia currently accounting for just 10 per cent of group sales. Over the past financial year, 25 per cent of VALD’s total sales were generated from the health sector.
“One year earlier it was about half as much,” says James. “But the market for us has effectively more than doubled when considering that overall sales last financial year went up quite significantly as well.
“We expect health to be the dominant market for us worldwide within a few years. It’s a bigger opportunity for us and a more meaningful impact by our business.”
VALD’s products are used to measure musculoskeletal and neural performance by analysing movements. In sports it assists elite athletes to improve their physical performance, while for physiotherapists it allows them to objectively assess patient injuries from which they can recommend treatment and rehabilitation.
Augmenting pain analysis
“Our technology augments what a physio would already do,” says James. “We can measure or monitor physical conditions that a physio would normally assess by sight or by feel. Sensors within our devices track these issues and our software presents it to the physio to help them interpret a particular condition.
“Physios receive information that is not subjective, and they receive it in a really digestible format that offers reliable data. From there it is up to the physio to decide on what they will do for their patients.”
VALD sees the allied health market as the key area of growth for the business based on the addressable market.
“When you look at the size of the elite sports market around the world, there are probably around 8,000 professional elite sporting teams and associations around the world that would be able to afford our equipment,” says James.
“In physiotherapy the number is closer to one million, which doesn’t include China or India, so its significant number for our potential market.
“Then if you look at the number of people with some sort of musculoskeletal condition such as backpains or shoulder injuries, the number is something like 1.5 billion globally. We’re a little way from helping every person in each category but that’s a goal we are working towards.”
VALD has a team of about 40 software engineers and six hardware engineers among its team of 180, making it predominantly a software developer.
The company began in 2015 with a single product licensed from the Queensland University of Technology (QUT). Now it has about 10 products in its arsenal, including the DynaMo Handheld Strength and ROM which it launched in April this year. The DynaMo, VALD’s most popular product to date, is an all-in-one handheld dynamometer and inclinometer that performs more than 300 strength and range-of-motion tests.
“This is an entry level device with the lowest subscription that we offer and we are actually getting a lot of physios employed by clinics buying it for themselves,” says James.
“We have more fully featured options for those clinics with multiple locations and staff, and our clients can upgrade into those products.”
Acquisitions are an important part of VALD’s growth strategy. James reveals that half of the products VALD has launched so far have been developed in-house while the rest have come from acquisitions.
“We’ve completely reengineered the products from ground up once we have them internally, but that allows us to bring the products to market a lot quicker than if we had to start from scratch,” he says.
Late last year, the company bought two hardware assets from performance optimisation software company Fusion Sport, including the SmartSpeed Timing Gates System, which measures physical speed and agility.
That deal was reported to be worth between $4 million and $10 million, but more importantly it led to the Queensland Government’s investment arm, Queensland Investment Corporation, taking a stake in VALD.
QIC funded the acquisition which was borne from a ‘good relationship’ VALD’s founders James and Malone had with Fusion Sport's founder Dr Markus Deutsch.
James says QIC’s investment was validation of VALD’s business strategy and its growth forecast. It was also a strategic move by QIC to keep VALD based in Brisbane as the company has become accustomed to receiving buyout offers from overseas parties.
“On a personal level, we prefer to keep the business here,” says James. “They saw the opportunity for a good investment and potentially keeping a Brisbane-based company in Brisbane. They are one of our larger investors over the years and certainly the most recent.”
While VALD looked closely at an IPO last year, this was abandoned to pursue what the founders see as a more flexible growth strategy for the company in its current form.
“We have a lot of big things we want to do, a lot of product development that we can get done privately that may have been hampered if we went public,” says James.
“It’s certainly not off the cards, but for the time being we prefer to remain private as the formula is working well for us.”
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