Travis McDonough says he feels like his team has just won the Stanley Cup.
McDonough is CEO of Kinduct, a Halifax sports tech company he founded 10 years ago. Last Friday, it was acquired by mCube, a San Jose, Calif.-based firm best known as the developer of the smallest motion sensors in the world, making it a technology leader in the “internet of moving things” sector.
The deal was announced Tuesday but the price mCube paid for Kinduct has not been released, said McDonough in an interview, although he acknowledged he won’t have to sleep with one eye open anymore.
The Kinduct sale, McDonough said, is the biggest financial exit of a sports startup in Canada and the biggest exit of a tech startup, majority owned by Nova Scotians, in the province’s history.
“Joining mCube, an established Silicon Valley technology leader, is a great opportunity for the Kinduct team to expand globally,” said McDonough.
Returning to the hockey analogy, he said the sale of his company is “exceptionally good news,” he said.
“We’ve been working towards this common goal of getting this company to the place of maximum opportunity and, look, it was a very big exit financially but more importantly it allows us to collectively enjoy a Stanley Cup victory, so to speak, in the tech space as a group of people who have really worked for 10 years, relentlessly, towards this common goal.
“And for us too, it allows us to look forward to almost like ‘a next season’ with a bigger entity and looking forward to winning two championships, back to back. So, it’s a really good opportunity and it’s a really rewarding feeling right now,” McDonough said.
When he founded the company, Kinduct was focused initially on health care, educating patients with 3D medical animation and rehab programming.
It has evolved over the last 10 years, he said. The Kinduct cloud-based Athlete Management System is used by trainers and performance staff around the world in professional, collegiate and Olympic sports as a tool to consolidate athlete data and identify insights to improve performance and wellness.
The acquisition by mCube opens the door for Kinduct’s data consolidation and visualization engine to move beyond human performance into new biomechanical and digital health markets, said McDonough.
Asked how long it has taken to cobble together a deal with mCube, he said with a chuckle, "It has been a long time."
“It’s been 12 months since we agreed on things . . . and Friday we kind of officially got the deal over the line. You throw in COVID and many tumultuous (things during that period) so, yeah, it feels that much better almost because it was such a challenge in these trying times.”
As unbelievable as it sounds, the Golden State Warriors of the NBA, one of Kinduct’s clients, played a role in the deal.
Joe Lacob, the Warriors’ majority owner, used to be a partner in the Kleiner Perkins venture capital firm headquartered in Menlo Park, Calif. Kleiner Perkins is also an investor in mCube.
“He mentioned to mCube about us and that the Warriors were doing stuff with Kinduct,” McDonough explained.
Soon afterward, Ben Lee, CEO of mCube, called McDonough and they built up a business relationship before negotiating a deal.
“We really believed in the vision of what we call ‘the full-stack solution.’ Having hardware and sensors and modules to elicit data that could flow up onto our platform, for security, for contextualization, for understanding that leads to better recommendations to get better outcomes,” McDonough said enthusiastically.
“It really felt natural as we looked at the various potential exit strategies, or the potential series B options, and this one really had the best upside for all involved.”
Selling to mCube wasn’t something Kinduct had to do, he said. The small Halifax company was growing at “a very significant rate” but McDonough said the people behind Kinduct also consider themselves self-aware.
“This was a strategic decision. We knew we needed more international exposure and this is one of the things (mCube) offers, is representation from all around the world,” he said.
“Also, we knew we need to create more specific wearables and data-elicitation devices for the different populations that we serve. . . . It was a great fit as we looked at the different options and we believe now in a go-forward plan.”
McDonough said the goal will be to scale up the local presence in support of the collective group of companies: mCube, another subsidiary, Xsens, and now Kinduct.
“It’s not like ‘Hit the light switch on the way out the door.’ This is a doubling down and growing our local economy even further.”
When mCube acquired Xsens a little more than two years ago, McDonough said, Xsens just about doubled its staff and has been growing revenue and international presence.
“We are trying to replicate that model. Of course, there are synergies between the three companies, so we’re going to make sure we lean into those synergies but we have every intention of growing our presence here and at the same time grow our reach globally.”
Currently, he said, Kinduct employs about 70 people in Halifax.
McDonough said he is becoming an investor in mCube and will be sitting on the board of directors of the parent company. Part of the attraction is a plan for mCube to have an initial public offering within the next 24 to 36 months.
