Uncovered is our exploration of the companies that don’t receive as much media attention or analyst coverage. We believe every company has an interesting story and we want to hear them.
Come join us and expand your view of what is possible as we uncover the uncovered.
Concussions are sport’s biggest challenge
The biggest challenge facing sports around the world is concussions. For decades, the long-term effects of repeated head knocks went unstudied. But as the world started to realise the long-term damage that repeated head knocks could have, it has become an existential challenge for some contact sports.
Repeated concussions are believed to cause chronic traumatic encephalopathy (CTE) which is a degenerative disease of the brain. CTE results in a progressive decline of memory and cognition, as well as depression, suicidal behaviour, poor impulse control, aggressiveness, and eventually dementia similar to Alzheimer’s disease. Right now, CTE can only be diagnosed after someone dies and their brain is examined. So it is difficult to study the disease. But the more we learn about CTE, the more the sporting world is worried.
It is not just the sports you’d expect that are facing this challenge. Different sporting codes from all around the world are facing large class actions from former players: NFL, AFL, Rugby League, College Football, Water Polo, Lacrosse, and Hockey.
This story has made headlines in Australia over the past few weeks as the AFL faces a second class action from past players and the NRL changed their concussion policy.
Hit-IQ believe they can help
Sporting codes, athletes themselves and concerned parents are all looking for solutions. Enter Hit-IQ, the $5.5 million Australian company that are positioning themselves as a world leader in concussion management and claim to be building “the world’s first end-to-end concussion management platform”.
The concussion management platform has a number of pillars that they believe will help athletes and medical staff detect impact, measure and monitor the brain.
When it comes to concussions, there are two different types of force
Early research on concussion suggests that there are two key types of head impacts: linear acceleration and rotational acceleration. From studies so far, rotational acceleration is a key cause of concussion.
For the past few years, Hit-IQ have been working on a product to measure the head impacts and the different types of forces that an athlete will feel throughout a game. This work has resulted in the Hit-IQ smart mouthguard.
How does Hit-IQ’s mouthguard work?
Think: a traditional mouthguard with sensors to monitor any head impact event.
Hit-IQ began collecting data and testing their products with a number of professional AFL and NRL clubs in 2019. As a result, when St Kilda’s Josh Battle and Freemantle’s Nat Fyfe contested for this ball, Battle happened to be wearing a Hit-IQ mouthguard.
The readout from this head clash shows that Battle absorbed a substantial linear force of nearly 54Gs but a relatively moderate amount of rotational acceleration. While Fyfe wasn’t wearing a Hit-IQ mouthguard, researchers believe he turned his head right as the point of impact and would have felt significantly more rotational acceleration.
This early research yielded some surprising (and worrying) results. According to their data:
- 50% of concussions go undetected and unmanaged
- The average smart mouthguard users sustained an average of 13 head impacts per game in 2022
From these trials, Hit-IQ has now developed a consumer product which launched in early 2023. Now, everyday athletes (and concerned parents of everyday athletes) can purchase a smart mouthguard on their website for $209. Athletes then need to go to a dentist to have the mouthguard moulded to their teeth.
In December 2022, Hit-IQ signed a 12-month exclusive partnership with Bupa to make their mouthguards available to patients of Bupa’s dentist clinics.
The smart mouthguard then syncs to an Impact Insights App that allows players to track their head impact events.
A look at Hit-IQ’s financials
Hit-IQ is a tiny company, worth just $5.5 million at the time of writing. It has been a tough couple of years for the company with the share price falling almost 90% in the two years it has been listed.
The investors that hung on through the past couple of tough years would be encouraged to see a recent big step up in revenue. Hit-IQ brought in $2.5 million for the final 6 months of 2022. Up from $0.4 million it brought in for the first six months of 2022.
Unsurprisingly for a company this early in its journey, Hit-IQ is not profitable. In the six months between July and December 2022 it lost $1.6 million.
The numbers that matter
For every Uncovered write up, we finish with the numbers that matter to help us narrow our focus onto the few things that will really determine the outcome of the business. For Hit-IQ, in our opinion, it is less about numbers and more about the technology. If the company can prove their mouthguard and associated tech platform can help athletes and support staff manage head injuries, then the numbers will come. If they can’t, then they’ll end up being an expensive mouthguard.
As such, we’re watching the number of trials with professional sports teams and how many of those trials convert into ongoing sales relationships. It is intuitive that as the professional athletes go, so the amateurs and children will follow. If you know that your favourite AFL player relies on a Hit-IQ mouthguard, we can be confident that every young footballer around the country (and their parents) will be ordering one online as well.
Clearly, the sales of the consumer smart mouthguard is one to watch. But if these trials with professional sports leagues are successful, these consumer sales will come in time.
So rather than closing out with the numbers that matter, we’re closing out with the trials that matter. Here’s our list for this point in time:
Trialling Smart Mouthguard:
- United Rugby Championship (partnership announced December 2022)
- Mercer University Lacrosse (announced February 2023)
- Tennessee Volunteers Football
- South Carolina Gamecocks Football
- Western Australian Football League (WAFL)
- Scottish Rugby Union
Trialling CSX Concussion Assessment Platform:
- Rugby League World Cup
- National Rugby League
- Australian Football League
- New Zealand Rugby
- New Zealand Cricket
- England and Wales Cricket Board
- English Premier League
