Security Matters reaches full maturity and commercial deployment

Having secured sufficient funding ($4.171m), and after recently posting US$1m in full year revenue, Israeli-based Security Matters (ASX: SMX) reminds investors that the company has moved well beyond being ‘market-ready’ and is now fully engaged across many industries globally.

Security Matters founder and CEO Haggai Alon sees client engagement to date as growing validation of the universal need for the company’s ground-breaking digitised tracing technology. 

Company endorsement aside, Security Matters also received the 2021 Global Waste Management & Recycling Digitalisation Technology Innovation Leadership Award by Frost & Sullivan in November 2021.

Decarbonise or face existential threat

Much of the global need for the company’s technological contribution to innovative recycling and waste management comes from the global imperative around carbon (CO2) reduction. 

What’s evident from the recent COP26 Climate Change Summit at Glasgow is the insurmountable realisation that decarbonisation has rapidly shifted from being seen merely as a ‘nice-to-have’ to an essential business imperative with existential consequences for those businesses choosing to ignore it. 

While COP26 and other policy initiatives by government’s globally have helped create a broader sense of urgency around decarbonisation, Alon doubts they’re sufficient to consummate the transition to a clean energy economy. 

However, Alon notes that institutional investors are doing much to push the decarbonisation envelope going forward.

Carbon neutrality is front & centre of business sustainability

Alon reminds investors that a growing number of institutional investors globally – including Blackrock, the world’s largest asset manager – have thrown down the CO2 gauntlet: Namely, achieve carbon neutrality or face being locked out of future funding.

“Security Matters has established itself as the most mature market leader in the shift to a circular closed-loop economy, with a tech platform that allows physical objects to be digitised on the blockchain,” Alon said.

Simply put, the blockchain is a decentralised, distributed, public, digital ledger.

In layman’s terms, the company’s digitised tracing technology can be used to track a product across the supply chain, from raw materials to manufacturing through to recycling.

Originally developed by the Government of Israel and subsequently proven at scale, the company has over the past 18 months entered multiple research partnerships in Europe and Australia.

Value chain and scale

By taking a value chain approach, Security Matters expects its technology to progressively replace human auditing and be relevant across the entire ecosystem.

Security Matters wants to play a role in new markets based on recycling, by using the company’s technology to turn waste products into commodities.

Since the second quarter of 2021, Security Matters has been ready for full commercial deployment, and Alon believes recent watershed contracts provide meaningful insights into what the company is capable of achieving over the broader global economy, and at scale.

Watershed developments

Some of the initial landmark deals secured by Security Matters to date include a binding joint development agreement with global leader in Plastic Additives BASF to develop solutions for plastics traceability and circularity.

Following a successful extensive period of testing, Security Matters also entered a collaboration agreement with the US$19bn German automotive group, Continental. 

Under the terms of the agreement, Continental tests the use of the company’s patented tracking and marking technology to ensure that in the future the natural rubber used [in the company’s tyres] has been verifiably grown and sourced in a fully sustainable manner.

Then there was a partnership that will see LVMH Métiers d’Art collaborate with Security Matters on a series of R&D projects focusing on the traceability of origin for the raw materials used in the leading global luxury lifestyle conglomerate’s supply chain. 

Closer home, Security Matters collaborated with Perth Mint to establish ‘world first’ traceable mine to market gold solution. By tracing gold production, consumers and investors can be reassured that gold is derived from sources applying global environmental and operational standards.

More recent developments

Since then, the company has introduced a circular sustainable solution for the forest, lumber, and wood industry, and acquired a 100% interest in SMX Beverages Pty Ltd (SMXB), a joint venture between SMX and GlobalBevCo Pty Ltd.

Security Matters platform application has also expanded to become a global solution and industry standard both on rubber, timber, and lumber, through memberships with the Global Platform for Sustainable Natural Rubber. 

Customised for the plastic industry in December 2021, the company has also introduced its Generation 2.0 ‘Plastic Circular Economy Online Unit’ which lets clients unlock the possibility to reclaim and reuse plastic content.

By combining physical mark, a track and trace solution and a digital twin blockchain platform solution, the company’s platform can detect and quantify information on plastic products of any shape, size and/or colour.

Alon expects the commercial development of this platform to help companies comply with the 30% recycled Plastic Packaging Tax UK legislation.

By implementing the company’s technology to identify and report on its recycled content used in plastic packaging in the UK, Alon expects the cost of this tax to become minimal.

Strategic roadmap

Given the company’s strong balance sheet, Alon believes the company is well placed to progress ongoing pilot projects into commercial contracts.

Alon reminds investors that what underscores Security Matter’s maturity, and commercialisation phase, is the ability to apply the company’s technology solution to any company’s cost structure for the bottom up.

He notes that while there are 50 oil tankers of global waste being collected daily, the equally demanding issue is taking care of the waste from the last 40 years.

“But it’s not all about collecting waste, it’s also about what you do with it,” Alon noted.

“Driven by the company’s long-term vision and dedication to innovation, Security Matter’s will continue to offer its clients the ability to authenticate and verify the origination of its raw materials, as well as transition successfully to a closed loop economy.”

Security Matter's traded 13.64% higher at the close on Friday 28 January