Australia discovers Elsight

Elsight system  photo: company website

The Israeli data transmission and security company has seen its share price quadruple within weeks on the Australian Stock Exchange.

Four months ago, Israeli technology company Elsight (ASX: ELS) made its IPO on the Australian Stock exchange, raising A$5 million at a valuation of A$20 million. For three months, the share price marked time at around the offering price (A$0.2), but in the past few weeks this has changed: the share price has risen constantly, reaching A$0.82, more than four times the offering price. Elsight currently has a market cap of some A$68 million (about NIS 190 million).

Elsiight was founded in 2009 by its managing director Nir Gabay and VP research and development Roee Kashi, who both served in intelligence in the IDF. The company developed a secure system for real-time transmission of information that can send and receive encrypted data from and to anywhere in the world. It started out in the military market, with Israeli security forces among its customers. For several years it was limited in its ability to export its solutions, but today, as Gabay and director David Furstenberg told "Globes", the company not only sells its products all over the world, but it has expanded to new markets beyond defense and security, which is a large market in itself. Company chairman is Major General (res.) Ami Shafran, formerly head of the IDF Information and Communications Technology Command and bureau chief to Shaul Mofaz when the latter was minister of defense.

"We have developed a system that substantially expands the world's cellular bandwidth, and we can provide a very good security solution," says Gabay. "We can take any kind of data, break it down, and transmit it simultaneously over many channels, because we work with eight SIMs instead of one, and the very fact that the data is broken down into parts is an big security factor, making it difficult for any country or terrorist organization to intercept the data. We were therefore selected to provide security solutions for President Trump's visit to Israel." Elsight has recently won contracts with Israel Police, the Israel Prison Service, and the Israel Fire and Rescue Authority.

"If we can create very broad bandwidth and a very high level of security, why not provide a solution to an ambulance, for example, making it possible to transmit data on the patient's state to a remote medical team? This is an example of one activity vertical, in which we recently won a €6 million deal with a French customer," says Gabay.

Among the markets into which Elsight is expanding, according to Gabay, are drones, to which can be attached a "backpack" for transmitting in real time to a command and control center, or even to Facebook, for example; and broadcasting and television, enabling a television reporter to broadcast without a van and a complete crew.

What seems to have particularly excited investors, however, is another market: autonomous vehicles. "Future autonomous vehicles will need to communicate with one another, and this communication is one of the greatest challenges facing the industry, because if a hacker took it over, he could cause a mega-accident on a fast highway," says Furstenberg.

"Among other things, the world seeks a highly secure communications solution. We think that our solution is the ultimate in this area," he adds. Furstenberg says that Israel is a substantial center of gravity in the autonomous vehicle area, and that there are possibilities for forming collaborations that will help to create a competitive advantage.

Furstenberg believes that what caused Elsight's share price to jump is the fact that the company has very mature technology that is suited to, as he puts it, "a series of verticals crying out to the heavens for a solution," adding, "One of the company's greatest challenges is making correct decisions about what to focus on."

So far (up to the first half of 2017), Elsight is not profitable. Its revenue grew by 20% to US$402,000 in the half, in comparison with the corresponding period of 2016, but it lost US$1.5 million. "The company can certainly be profitable, but it is growing substantially and taking on workers, because we have an enormous business opportunity," says Furstenberg. "This is one of the things that makes Elsight interesting to investors."

Published by Globes [online], Israel business news - www.globes-online.com - on October 17, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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Elsight system  photo: company website
Elsight system photo: company website
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