archTIS set to become global-leading information security company in 2021 after transformational 2020

Proactive Investors Tuesday, 22 September 2020
archTIS Ltd (ASX:AR9) is set to establish itself as a global-leading information security company in 2021 after a transformational year in 2020 with the launch of its Kojensi software platform. Described as a “defining year” focused on establishing product-market fit and associated sales opportunities, the company has been extremely busy with the launch of the highly secure and trusted platform for sharing sensitive and classified files and document collaboration. Opportunities for continued growth Chairman Miles Jakeman said: “With product-market fit now being established and the veracity of the underlying technology proven, there are many opportunities to continue growing the archTIS business in public and private markets. “We expect growth to be organic and from selected merger and acquisition opportunities should they arise.” Solid sales pipeline The Kojensi software platform has made inroads into the target government market, with high-profile client wins include the Commonwealth Attorney Generals Department, Commonwealth Ombudsman and the Australian Criminal Intelligence Agency. It also moved into industries servicing the government which also need to share sensitive and classified information, culminating in wins in the education and space sector with Curtin University and the defence industry sector with Northrup Grumman. The Curtin University opportunity also provided product development opportunities in securing Big Data analytics. These sales have not only secured annual recurring revenue but this is expected to grow as clients continue to use Kojensi to share their trusted information with external parties. This has validated Kojensi’s market demand, Jakeman said, adding that the archTIS was continuing to refine and add features to the core product to offer customers an enhanced experience in the cloud and on-premise. In certain cases, this additional research and development effort was part-funded by customers. The company has now established a solid sales pipeline to be further executed over the next 12 months. It has seen just under $5.2 million in contract renewals and new wins in the first quarter of this financial year - more than double the entire prior year. Its activities have generated a sales pipeline of over $15 million of opportunities to be executed in the 2021 financial year. Chief executive officer Daniel Lai said: “This has come at a time when the Australian Prime Minister has announced a significant increase in targeted cyber-attacks across the country against government institutions, industry and businesses. "This was followed by the announcement of a $1.67 billion investment into Cyber Security by the Morrison government and a further $15 billion investment to deal with the information and cybersecurity needs within the Australian Department of Defence across the next 10 years. “archTIS is in a strong position to capitalise on this large market opportunity, “ Lai added. Key partnership with DXC Technologies archTIS also signed a key partnership agreement with DXC Technologies during the year to further expose the Kojensi platform to the market and increase sales opportunities. Under the deal, DXC will offer Kojensi as a managed service to their National Security Community clients opening significant growth opportunities for Kojensi sales and a pathway to access up to 7,000 users in the Australian National Intelligence Community. Reseller deals A reseller agreement was also signed with TEAM Asparona to sell Kojensi in New Zealand. It also signed three strategic reseller deals with Nucleus Cyber, Appsian and Axiomatics to enable archTIS to provide holistic trusted information sharing solutions across the Microsoft collaboration suite, ERP systems and Big Data Lakes respectively. Funding The company raised $2.3 million in May 2020, which provided vital cash runway needed to convert its sales pipeline and continue the sales momentum into the 2021 financial year, Jakeman added. Board changes Shortly after the end of the 2020 financial year, archTIS continued its business optimisation process, reducing the number of directors from six to three. It also established a strengthened strategic advisory capability through the formation of an advisory group led by former board chair and non-executive director Stephen Smith. This group also includes former directors Bruce Talbot and Wayne Zekulich, retired Brigadier Alison Creagh AM CSC and Jeremy Waine, a former corporate finance and M&A specialist. The revised archTIS board now consists of Jakeman as independent chair, Leanne Graham as independent non-executive director and Daniel Lai as executive director and chief executive officer.

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