In this edition of the Star Investing podcast, we sat down with Haggai Alon to talk through one of the more interesting stories on the ASX.
We talk about how the company has targeted industries such as agriculture, tech, and minerals to create a bottom-up verification service which uses proprietary markers to tag physical objects, track them, and the then verify them using a blockchain ledger.
We also talk through the company’s growth plans for the next three months, and how recent news that it added 500,000 codes to its database could be a game-changer.
Star Investing: Thanks for joining me today. Security matters is one of the really interesting companies on the ASX which is kind of flying under the radar a little bit. So let’s say you’re at a dinner party and somebody asked you what Security Matters does. How do you respond to that, because the company is playing with some wild stuff, like track and trace and blockchain has? How does that all fit together into the one solution?
Haggai Alon: Good morning, and thank you very much. First, I would advise him to finish to eat and have a good dinner, and maybe a drink. And afterwards, we can have a chat, I like people to you know, finish their meal, I wouldn’t want to, you know, stop somebody from getting his appetite, you know, all set up, then I would tell him that what we are creating is trust.
Why trust? Because we’re creating a bridge between the physical world and the digital world, we create the ability to trust, digital visual tracking on one hand, and then physical tracking and commercialisation.
On one hand, we create a safe pass between those two big economies. And the reason is because we can mark solid liquid gas phases, and send all of this data in a secure way to a unified platform, a blockchain platform. So this is what we do.
On the first level, we mark, we track we trace, we create liability, we create transparency, we create a better business, a better flow of business of goods between big brands. And we see energised and we create the synergy to the digital ledger, and therefore build a much more faster and viable connexion between those two big economies.
SI: So at its core, it’s just about marking objects. And then it’s kind of up to the end user where they send those objects and through your solution, they’ll be able to track them and have, I guess, assurance that nothing’s been tampered with.
HA: I agree. But I think there’s another level of depth to it.
We’re making an evolution of how something is identified. And the way we do it is that we mark, we give the ethical data, of the product of the raw material inside itself.
The product holds all of the data that is relevant so you don’t have external items, methods, technologies, and reflecting what it really is.
And this is very unique.
Another thing I think, is part of this evolution is the fact that we do with one technology, the three life cycle spans of a product, which are:
From raw material to production; from production to commercial and; from commercial to recycling.
Add to that, on the digital ledger, you get a very powerful technological service.
SI: So the company has been up to a fair bit since we last had the opportunity to chat. But let’s stick with the most recent news from Security Matters, which is that you’ve effectively added 500,000 code to proprietary market database.
Now for luddites like me, what does that mean? Exactly? Does that mean Security Matters is now able to mark 500,000 individual items?
HA: Actually, it means we can mark much more.
I don’t want to go into depth of the of the of the calculation and statistics but each of the markers developed can be utilised for various and different applications and substrate. And then for can be useful as more than one marker. So what we really have here is pushing the boundaries of our capability to commercialise and to serve global brands.
SI: I guess so the question of on investors’ lips, when they hear something like that, is with they’re adding so many codes is just security about is getting ready for potential market demand? Or is it more of a function of demand currently you’re kind of seeing play out in real time?
I mean, does Security Matters think it will be using 500,000 codes at some point?
HA: I think it’s there’s some from both. I think on the one hand, as we said in our prospectus, we are preparing the capability to serve many global companies in different segments. And on the other hand, we are seeing demand and we are approached and within processes with companies that will be need these markers. So there’s a need behind it.
SI: So just touching on the blockchain side of the equation, Security Matters has been working with a company known as R3 on a solution — talk to me about how the blockchain side of the solution is going when it will be ready for testing and what role blockchain will play in the value proposition for Security Matters.
HA: Actually, it is ready, and we have shown to some of our customers what’s called a semi production full utility system, that means that you can see the whole ecosystem of marking tracking authentication, and transmitting to the ledger and getting back the data.
So actually, the system is in place and ready to be deployed.
What we’re doing now with R3 is defining a security protocols and defining processes that will enable that to be deployed on various IT systems of different clients, because our notion is that we have to adapt to different IT systems. So this is what we are preparing now.
SI: Great. So it sounds all really positive. One of the things about covering Security Matters, and I’ve been covering them now for…I want to say five months or so, is that for a while there, it seemed like the company was doing a trial with a different company in a different sector almost every week.
So I’m just kind of wondering if you can give me a rundown of some of the industries Security Matters has targeted and why you’ve targeted those industries.
HA: The reason is that we believe in a philosophy of going bottom up.
That means we believe that starting from basic economies that are critical for many upstream uses, is the right way to create a viable, sustainable long term growth strategy.
Because it’s all about creating a fast adoption rate to the technology. And the way to do it is to create value proposition that almost any kind of all material and production line will be able to adopt our technology. So this is the logic behind things.
SI: Can you give me an example of one of those bottom up industries that you’ve targeted? I think mining is something you’ve talked about, the electronics manufacturing sector or something you’ve talked about in the past as well…
HA: Yes, it’s a known fact we have an ongoing project was the Perth Mint. And of course, our philosophy in the agri secure market, to go to seeds. And to animal feed is exactly for the same reasons.
SI: Okay, that’s all sounds really positive and security. Now this is definitely a company I want to keep an eye on for the coming months but of course in tech things can move very quickly.
But I’m just wondering if we can just wrap up by you give me a taste of what investors might expect to see from security measures, say in the next three months?
HA: I think we’re on the path that we stated in the last year. We are in negotiating with big brands and names within the segments we are working, ethical mining and sourcing of minerals, plastics, from secure documents to secure and smart packaging.
Of course, everything related to electronics, and food security. We are continuing in all of those fields to progress and to get demands and get the traction from fairly big and interesting. household names.
SI: Okay, so watch this space. Haggai, thanks for talking to me today.
HA: Thank you for the opportunity. We appreciate it very much.
This content is produced by Star Investing in commercial partnership with Security Matters. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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