Smartwear capital
Montreal’s wearable techs vie for top spot with Toronto
Despite reports this past year citing Toronto as a hotbed of wearable technology — with roughly 15 companies producing products — several entrepreneurs and investors in Montreal insist their city is primed to take over within two to three years, particularly in clothing.
Montreal high-tech startup Vrvana, for example, is creating a virtual reality headset — a sleeklooking piece that surrounds the user’s head while he or she enters an all-encompassing video game world, via a 1440-pixel onboard camera. The headset, Totem, garnered plenty of interest after a early January trip to the Consumer Electronics Show (CES) in Las Vegas.
Oculus VR, its biggest competitor, was acquired by Facebook for US$2 billion in March 2014. Goldman Sachs predicts Oculus will sell three million of its headsets in 2015, priced at US$350. That has Vrvana’s founder Bertrand Nepveu, a gamer and engineer, excited. After 10 years of research and development, Vrvana is nearly ready to release its headset that will sell for less than US$475.
Vrvana is one of several Montreal-based companies creating innovative wearable technology that allows users to gather real-time insights.
Neptune, for example, created the Pine Smartwatch in 2012, the world’s first smart watch with a stand-alone computing system. It raised more than $800,000, at the time one of the highest amounts for a Canadian project on crowdfunding platform Kickstarter.
Simon Tian developed the idea for the smart watch when he was an 18-year-old student at Marinopolis College. Neptune saw revenue of $1.5 million in 2014, mostly from pre-orders of its wildly successful Kickstarter campaign. Mr. Tian is creating a second version he says will completely alter people’s view of a smart watch.
Hexoskin and OMsignal both played pioneering roles in the global smart wear industry with clothing that tracks the body’s biometric activity, such as heart rate, breathing and calories burned.
In an interview, Tom Emrich, a Toronto-based consultant and founder of We Are Wearables, an organization and blog devoted to wearable technology, called Montreal the smartwear capital of the world.
“Hexoskin and OMsignal have really cornered this emerging market of fitness wearable technology that Gartner said is going to explode,” said Mr. Emrich, whose We Are Wearable’s monthly meetup group is among the largest in the world.
Gartner research predicts 91.3 million wearable tech units will be shipped in 2016, while a well-referenced study by Juniper Research forecasts retail revenue from wearable tech could reach $19-billion worldwide by 2018.
Hexoskin, founded in 2006 by Pierre-Alexandre Fournier and Jean-François Roy, offers several different shirts with embedded hardware and an accompanying app. It’s shirts start around $169. Although he would not divulge the exact revenue figure, Mr. Fournier said the company grossed between $1 million and $5 million last year, and expects growth of 200% in 2015 and 2016.
OMsignal’s biometric smartwear, co-founded by Stéphane Marceau and Frédéric Chanay in 2011, markets to the fitness crowd. The company raised $11 million from investors including David Cohen, founder of TechStars accelerator programs. Its shirts start at $120.
Heddoko, also in the biometric clothing sector, was launched by several former employees of Montreal’s video game industry. Its smartwear and software helps athletes mirror-track their mechanical movements. It was a finalist in two of three major awards handed out at Montreal’s International Startup Festival.
Several experts attribute Montreal’s rising stronghold on smartwear to the city’s historical strength in manufacturing. Both Mr. Fournier of Hexoskin and Mr. Marceau of OMsignal point to the city’s former dominance in the textile and cloth- ing industries as an influence.
By 1947, Montreal manufacturers including Dominion Textiles Inc. accounted for nearly all of Canadian textile output. Before the Canada-United States Free Trade Agreement came into effect in 1987, Canadian-made products still satisfied about 70% of domestic demand for textiles and clothing, mainly from Montreal. That agreement led to the North American Free Trade Agreement in 1994, which included Mexico. Thanks to those agreements and mass production from developing nations such as Mexico, China and India the industry has all but died out in Montreal.
“People always claim continuity as a means of legitimacy,” said Suzanne Morton, undergraduate program director for history and classical studies at McGill University. “There was an important textile and clothing sector here and so in its greatly diminished state it could provide a place to develop niche, high-value products.”
In its place is a scattered group of fashion businesses, from high-end boutiques on St. Laurent Street to ecommerce darling Frank and Oak. All of this, Mr. Fournier said, played a role in building Hexoskin, which produces all its shirts locally.
While Mr. Marceau cited the city’s rich history of textile and clothing production as having an influence on his startup, he also said the city offers a great pool of talent with its high number of university graduates ready to enter the workforce as engineers, developers and scientists. As early as 2013, the city was credited as having the highest number of university students per capita of any city in North America. Along with that, salaries are much lower than in Silicon Valley.
“It ’s a very reasonable scenerio that smart clothing explodes and it becomes a huge industry, and Montreal establishes itself as the epicentre,” Mr. Marceau said.
Sylvain Carle, general manager and program director at Montreal’s FounderFuel, thinks the city is well-positioned to become Canada’s wearable technology capital within 24 to 36 months. After stepping in to the job seven months ago, Mr. Carle immediately offered hardware and wearable tech startups $100,000 to join the accelerator. Real Ventures, the parent venture capital firm of FounderFuel, invested in OMsignal and Vrvana.
“As technology transforms more industries, it just naturally occurs that our scope will widen, and wearables is one of those spaces where things are happening,” Mr. Carle said.
Still, he sees distribution as a nagging challenge for the city’s talent, which often starts in university research labs. The cycle from conceptualization to commercialization needs to reduce from years to months. “We need to get better at that,” he warned.
It’s reasonable that … Montreal establishes itself as the epicentre