Seedfunders portfolio company acquired for $14 million

Intelligent Observation Inc., a portfolio company of St. Petersburg-based investment group Seedfunders, has been acquired for $14 million by HID Global Corporation in an all cash deal. 

Created by Seth Freedman, the Miami-based company develops hardware and software that help healthcare facilities monitor hygiene compliance (hand washing, etcetera). 

For Seedfunders founder David Chitester, it was “an easy investment decision.”  

Investment firm Dreamit Ventures contacted Seedfunders to see if it would like to also financially support Intelligent Observation.  

“We invested at the same time as they did, because other firms would not invest that early in companies in Florida,” he told the Catalyst. 

A key part of Seedfunders’ strategy is funding startup companies that only have a minimum viable product, or a version of a product that can be used by early customers for research. These organizations often have “little to no revenue.” 

We strive to be “the first professional investors on board for startups,” Chitester explained. 

This allows the company to make a profit on exits (acquisitions) that other investment firms wouldn’t, he added. 

Many investment groups will not back a business until it is worth $10 million or more. Seedfunders invests in organizations that are worth less, he continued.  

Intelligent Observation’s recent acquisition is “significant for us because it justifies our philosophy that we can make money on early investments.” 

Chitester and his team began to work with Intelligent Observation in 2019. The company’s innovative technology was a key factor in the decision to invest.  

Intelligent Observation’s system, which includes wearable devices for hospital staff, uses near-field magnetic induction technology to see when and how long staff members wash their hands. Sensors are placed around the facility and its sinks and soap dispensers to track performance. 

The product then collects data that is reported back to the facility’s leadership. 

“We thought this was really needed when we looked at what they were doing,” Chitester said.  

“Hospitals are required by the government and funding institutions to report on how they’re compliant with protocol on things like handwashing.” 

During the Covid-19 pandemic, the company “took off,” he added. This led Seedfunders to invest again in 2020. 

The St. Pete investment firm was not involved in the acquisition negotiation process. 

Intelligent Observation website