Tesserent Ltd’s (ASX:TNT) Tesserent Innovation has signed a share subscription agreement to acquire an initial 7% stake in Daltrey Pty Ltd, a sovereign biometric company, and has an option to increase this based on certain conditions.
The biometric technology of Daltrey, a Sydney-based company, enables an organisation’s users to prove their identity in both digital and physical format without the need for passwords or swipe cards, thus improving trust and accountability across the enterprise.
As a part of the deal, Daltrey will initially work with Tesserent’s Canberra-based team to deliver sales into the Federal Government market who are actively evaluating increased adoption of biometric solutions.
Daltrey is a potential global leader in the multi-billion-dollar cybersecurity industry.
“Excited about market growth”
TNT co-CEO Julian Challingsworth said: “We’re very excited about the growth in the biometric security market.
“We note some US private equity organisations have been investing in the market with a recent investment of $543 million into Transmit Security, supporting our belief that biometrics will play a key role in security organisations’ data and systems in the near term.”
Financial details
Tesserent will initially invest $600,000 for an initial stake of 7% with a follow-on investment of a further $1.1 million upon successfully meeting key growth targets.
It also has a further option to invest an additional $10 million subject to the performance of the company and future capital requirements.
This initial cash consideration is fully funded from TNT's existing reserves.
The global biometric technology market size is projected to reach US$11.49 billion by 2026 from US$6.14 billion in 2020, a CAGR of 11.0% during 2021-2026, according to a report by leading economists.
Tesserent Innovation
Tesserent Innovation was founded by the company to invest in high growth cyber-IP opportunities with certain conditions including:
- The investee has revenue from existing customers;
- The investee has a solution that clearly align with Tesserent Cyber 360 strategy;
- Tesserent can take a small initial shareholding with the option to scale up the level of investment when the investee delivers on their growth targets;
- Tesserent can secure premium distribution rights to take the investees solutions and products to market; and
- A future liquidity event for the investee will deliver strong returns for the company’s shareholders, potentially through an in-specie distribution.