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Macdonald Henderson advises on completion of investment in Smart Compliance, 24 April 2013 - Click for larger version Macdonald Henderson advises on completion of investment in Smart Compliance, 24 April 2013

Macdonald Henderson has acted for Smart Compliance in the completion of an investment in the company by TRI Cap, using the Seed Enterprise Investment Scheme (SEIS).

The investment was completed earlier this month, with co-investment from SIB’s Scottish Co-Investment Fund.

Smart Compliance has developed a carbon monoxide detector which can transmit its results by SMS or GPRS to a remote location.

The technology can be set up to detect either carbon monoxide, or smoke, or both. The device is self-checking, and can report on its functionality at any interval required.

Carbon monoxide can be produced by any fuel-burning appliance when the combustion of carbon based fuels such as gas, coal, oil or wood is incomplete. According to Dame Sally Davies, Chief Medical Officer for England, “carbon monoxide remains a silent killer, which leads to 50 deaths every year”. For this reason there is pressure in various countries for legislation to make the use of carbon monoxide monitors compulsory in homes and workplaces. In the UK, Northern Ireland leads the way, following the deaths of two teenagers from carbon monoxide poisoning in 2010, having introduced legislation last year to require monitors to be fitted in all new homes, and whenever a new boiler or stove is installed.

In Scotland, the Scottish Building Standards Authority is in the process of introducing legislation which goes beyond that of Northern Ireland, extending the mandatory requirement for the installation of carbon monoxide detectors to commercial properties; this is expected to become a legal requirement in October this year.

There have been successful prosecutions when local authorities and landlords have failed to provide suitable health and safety precautions for avoiding harm from carbon monoxide.

Smart Compliance’s technology is targeted at those organisations, particularly providers of social housing and operators of retail premises, who must demonstrate compliance with H&S legislation, as the records from each detector are safely stored and are logged by each postal address. The company plans to offer an integrated service to this market sector, but also sees major opportunities in providing stand alone devices to domestic owners or occupiers, either through normal retail outlets or by licensing to third parties such as fire alarm and security firms, and will develop a smart phone app for this market.

The company was started by Billy Mitchell and Scott Wallace, who had previously founded Smart Systems Scotland in 2003 to capitalise on eco friendly and smart housing. They both worked with MITIE Engineering Services from 2003 to 2010 before returning to focus on Smart Systems and Smart Compliance, coinciding with the granting of a full UK patent for “sensing any gas particulate in air, transmitting the result using mobile communications technology and monitoring the results per individual postal address on a database”.

The carbon monoxide detector has been in final test for the past six months with 20 units in various locations from Portugal, London, Glasgow and Edinburgh, to rural Central Scotland. The system is expected to be on sale before the end of this year.

Although Smart Compliance had had grant funding from Scottish Enterprise’s High Growth Pipeline, and won a SMART award in November, the founders had exhausted their personal funds and needed to look for external equity. The company had won a number of industry awards as an early indication of market recognition, and had a working prototype so knew that the concept was proven. The company’s accountants Sharles introduced it to angel syndicate TRI Cap, in the event the only investor approached. An investment of £213k from TRI Cap, using the Seed Enterprise Investment Scheme (SEIS) for the first time, was completed earlier this month, with co-investment from SIB’s Scottish Co-Investment Fund.

The new funding will be used for securing a BSI Kitemark, the purchase of injection moulding tooling, samples for pilot testing, initial batch manufacture, and marketing and sales activity.

Smart Compliance’s technology can be adapted, as its patent implies, to the detection of other gases besides carbon monoxide, which the company sees as just the first of many applications.

Company

Company: Smart Compliance
Incorporated: November 2010
Location: Bellshill
Sector: sensors

Contact

Contact: Billy Mitchell
Telephone: 01698 840425
Website: www.smart-compliance.co.uk

Deal Data

Completed: 28 March 2013
Amount: £213k
Investors: TRI Cap, SIB (SCF)
Advisers: Macdonald Henderson

(Copyright - Young Company Finance, Issue 172, April 2013)

Last updated: 4.45pm, Monday 13th May 2013

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