“The advance of technology is based on making it fit in so that you don’t really even notice it, so it’s a part of everyday life.”
Today, we take a look at the UK leader in implantables, an exciting new area within biohacking, an industry which involves using technology to enhance the capabilities of the human body.
BioTeq, founded in late 2016 by Stephen Northam, claims to be the UK’s ‘leading human technology implant specialists.’ The company inserts a microchip into your hand, which is able to store a small amount of information, and this technology allows you to interact with external objects, such as scanners, in a more convenient and secure manner.
There are 2 types of BioTeq microchips:
- NFC: near-field communication, where electronic devices in proximity can communicate, such as with contactless payments.
- RFID: radio frequency identification, which uses electromagnetic fields to automatically identify and track tags attached to objects, with predominant use in tracking warehouse inventory.
These chips are inserted, during a sterile procedure, in between the thumb and forefinger of the hand. The operation is similar to getting a vaccine at the doctors’, and the microchip is no bigger than a grain of rice.
The chips are not considered medical devices by UK standard agencies and are therefore not subject to the same level of regulation. Nonetheless, the chips are assembled in UK labs for quality control.
PROBLEM + SOLUTION:
This innovation is attempting to change the way we carry and manage our personal data. The applications are numerous:
- Medical history and emergency contact details can be kept on the chips. If you arrive at A&E unconscious, doctors can access this information more easily.
- Improving the quality of life of people with physical disabilities; rather than wheelchair users struggling to open a door, door scanners will detect NFC chips in proximity, causing the door to swing open.
- Improving the quality of life of people with mental disabilities; for example, setting off an alarm when individuals with Prader-Willi syndrome, a disorder causing uncontrollable eating, approach the fridge.
and many more…
The main current applications of this technology are for work and travel. Employees at Three Square Market in Wisconsin and at Swedish start-up hub Epicenter have all been given the option of having the chips installed for work. They can open doors, sign in to computers remotely and even buy lunch from the canteen. Humans are prone to forget cards, and there is no risk of you leaving your hand at home!
However, awareness and understanding of this technology is generally at low levels and it has not been covered extensively by mainstream media outlets.
MARKET AND COMPETITORS:
Currently, there is no existing market! I can’t remember the last time I forgot my oyster card and said: “Gee, I wish my card details were installed into my hand.” The greatest inventions create a new market for the products, fulfilling a need that people didn’t even know they had. While that means a higher possible return, greater uncertainty also means higher risk for investors!
BioTeq is not the only company interested in implantables. Elsewhere in Europe, companies are making great strides in this new sector. One of the key examples is Swedish company BioHax, founded in 2013 by the charismatic Jowan Osterlund, a renowned body modification artist. Although the technology is more primitive, with only NFC capabilities, first mover advantage means that this company has been able to establish an international user base of thousands of people. The technology is FDA approved, and as well as serving businesses, they are partnered with SJ Swedish Railways to offer a complimentary travel card service.
The key difference between the companies is that BioTeq is initially tailoring their service to patients with medical needs, rather than everyday consumers, and is focusing on the untapped UK market.
WHO IS IN CHARGE:
Between founder Steven Northam, consultant Anaesthetist Dr Geoff Watson, and investor Mike Worley, the team has a good range of skills. It is important to note that Worley and Northam have collaborated on projects before, such as the ‘IncuHive’ accelerator space. Worley’s main expertise comes in manufacturing and mechanical/industrial engineering, while Northam’s ventures include a DJ and equipment hire facility and a clothing brand. It would be fair to say that although they have a range of experiences and business interests, none could be classed as experts in the Biohack space, and none have experience of running a company with a value of more than about £1m.
There are 3 primary sources of revenue for the company. They sell the NFC/RFID chips for £69.95 and £39.95 respectively and sell the procedure to implant the chips for an additional £200. Furthermore, they can install the hardware systems that make household items, such as door locks and car keys, chip compatible, with prices depending on need.
BioTeq recently attempted to sell 15% equity, on an online crowdfunding space, for £150,000, implying a post-money valuation of £1m. Although this is roughly average for seed funding, it is a lot for a company with little more than an MVP, and no established user base. Predictably, the company fell £60,000 short. Crowdfunding is normally a Plan B, which firms turn to after insufficient interest from angel investors so we can speculate that BioTeq is facing significant difficulties in attaining the funding required to develop the company.
Bioteq is a private company, so no financial information was available for in-depth fundamental analysis.
DRIVERS OF GROWTH:
- Partnerships: Many big corporations, such as Deloitte and IBM, are working on developing ‘Smart ID’ systems, a single digital wallet to hold all personal data. Merging this technology with implantable chips could be a game-changer!
- Existing technology: The microchip technology has been used for decades in household pets, so the actual material and technological costs are relatively low for the chips.
- Ease of installation: The operation is safe, simple and fast, with minimum risk.
INHIBITORS OF GROWTH:
- Technology + safety: The chips are yet untested against very high strength MRI scanners, with research ongoing, and there is a risk that the chips could break when installed.
- Data privacy: Although the chips are not GPS enabled and data is encrypted, many are worried that they are giving too much information to employers and potential hackers.
- Stigma: People are suspicious of this new technology. On one YouTube video regarding implantables, comments included ‘Illuminati,’ ‘Anti-Christ’ and ‘I will see God before I have a chip in my hand.’ BioTeq might struggle to convince these particular folk that a chip for increased convenience is a worthwhile payoff.
- Ethics: BioTeq acknowledges on their website that there are serious ethical debates to be had around implanting and monitoring mentally handicapped people.
- Cost: Even in cases where disabled people would significantly benefit from a chip, the NHS would not sponsor such an intervention, purely from a health economic perspective. Thus, it is currently only intended for private investors, and procedures are expensive.
Peter Thiel, the famous Venture Capitalist, talks about two types of innovation. We can develop a known concept, with particular applications; we can move from ‘1 to N.‘ Far better though, is a completely new idea, or movement from ‘0 to 1.’
BioTeq is a fantastic example of a movement from ‘0 to 1.’ I believe that this technology will become commonplace in decades to come, sooner if we see improvements in the technical specification and data storage capacities. However, this is a classic example of a poorly timed venture. If BioTeq were launched in 5-10 years, society might be more ready to accept the underlying idea. The infrastructure to use the chips isn’t in place currently, which makes the implant little more than an expensive gimmick, explaining the low investor appetite. When you combine that with factors such as larger competitors, a lack of technical expertise in the company and a plethora of factors which may inhibit growth, BioTeq needs to dramatically change its’ strategy and operational model if it wants to be a significant player in the growing implantables market
Financial stability: ★★
Competitive advantage: ★★
Final investor rating: ★★
This blog has been created using public information about BIOTEQ LIMITED, is an opinion piece intended for educational purposes only, and does not constitute professional investment advice.
There are no conflicts of interest in the publication of this article.