K- Here's my bulletpoints from the conference today. Please note, this was my interpretation of the presentation and not word for word what Jason was saying. He was very confident in how he talked about the product and where he see's this company going. I am disseminating this data because it was a presentation from today regarding the company as a pitch to potential investors. My post is in no way to be used as a 100% factual basis, this is what I heard and anyone with questions, should reach out to Jason or Matt with questions. Or just listen to the awesome presentation yourself!
Jason started by talking about the technology stack that they are evolving to help cover data compliance and governance across the world. Each one of these countries or States in the US have varying rules and the goal is to cover all of them.
Focus right now is to find accreative companies that impact revenues but also ones that impact the product offerings.. Targets have been companies that are smaller upwards of 4 million dollars revenues but have been in business for 5-10 years. Proven market capabilities. They have customers. All with the driven impact to complete the privacy story Data 443 is trying to cover for their clientbase.
Technologies are centered around breach response, government response and legal response for their customers.
Working with distributors in Europe (because per Jason's presentation, you can't sell anything in the EU unless you go through a distributor) and also are working on implementing with 2 major global distribution channels in the US which will replicate the concept of the distribution model in the EU in the US.
Talked about blockchain and ripple and how they were one of the first to be a data governance system for blockchain. Working with people to be able to leverage blockchain into their systems from an operational standpoint.
First to enable a SAS based distribution model for a data classification system. Focus is to figure out how sensitive the information is so as to only have to encrypt the sensitive data and not spend time on encrypting non-sensitive data.
Talked breifly about classidocs and wordpress plugin. 20,000 wordpress plugin users for GDPR compliance.
Talked about Cyberark, Citrix as partnerships.
Talked about doing an in depth 3rd party risk assessment on behalf of one of araloc's customers. They did an in depth security review of a global 500 company and they passed with flying colors!!!
Introduced a FB data sensitivity classification system. Login with fb credentials, scan every fb transactional history including tagged posts to pull which transactions that could potentially be sensitive to the user. Expecting to use the same framework to apply to twitter and other social media websites. See's an opportunity to apply it for associations, and large retail organizations to give to their customers as well.
Talked briefly about the Privacy Manager.
He doesn't think that a national GDPR like regulation will happen any time soon, but said that each state has taken it upon themselves to enact their own form of the regulations similar to CCPA. From a customers standpoint, many of the customers have clients in several different states and would be subjected to the data privacy laws of the various states you operate in. Each state is a little bit different. The challenge is how do you handle 32 states and different privacy laws. Data 443's solutions is able to abstract all of the multiple state requirements into separate queues and have them respond accordingly!!!! One solution for customer requirements!
Acquisitions will grow the product base, revenue base as well as customer base. Discussed that it's easier to acquire a customer base then it is to spend the time and money trying to bring them on through other means. The cross selling opportunities are definitely there.
Partnership growth opportunities is there as well.
Talked about changing the traditional model of the arcmail service from it being that of an appliance that customers use, to more of a full service that they provide. Data 443 will own the equipment and charge the customer for the service. This is more like a subscription based service now, that Jason said the market is showing a readiness for.
Market opportunity. Cyber Security industry is rather large. Jason is hopeful that they can take a slice out of the large pie by differentiating themselves to have software stacks that provide the customers with things that help with the plethora of laundry list items that can make things exceedingly challenging for one company to do it all.
Wordpress is a big play for them. They are using it to talk to the IT admins who utilize it to try to open
the door to bring more solutions to them. Idea here is to reduce cost of acquiring new clients.
Talked about HIPPA and the privacy of patient health documents and how that field is growing. It's something that they see opportunities in growing their platform in.
They are working on a personal version of classidocs. A solution an individual would be able to install themselves.
Acquisitions, they closed 3 last year. Did a licensing deal this year and 4 more in the funnel for this year. The purpose for the presentation today was to help them get funding to secure the next 4 coming on board.
Talked about the deals for these acquisitions. Most of the companies being acquired don't have the corporate structure like Data 443 is building but they do have profits, revenues and customers. Looking for 2x on the growth side. Structure of deals he didn't go into but said they can differ for each deal and will be structured to make sure the company is meeting benchmarks over the years. Many of them have a good engineering focus in terms of employees and not as much of the finance focus CFO, sales, marketing etc. so the good thing for Data 443 is they can capture a lot of that engineering focus and bring it under the Data 443 structure so the focus can be on just enhancing the product offering and possibly find synergies between their current product offerings. Looking for very little overlap on the acquisitions.
Finding that most of the companies have an EBIT of over 65% or better. Very healthy and a good upside for the acquisition.
Questions asked at the end.
SEC Reporting? Yes just finished.
How do you plan to raise capital?
Mixture of everything so far. Looking to do a larger raise this time to help with a proper uplist. Next acquisitions are a little chunkier on the cash side of the equation. Next 2 are more sizable.
Data 443 acquisitions are getting more attention because of situations where the owner has run the business and are starting to get much older. Jason comes to them and says they can plug their product into the data 443 stack and data 443 will take care of marketing, sales, development and support of the product all they gotta do is plug their brain into the company and help expand it. It opens the doors to making this appealing to them. He's expecting an accelerated deal flow because of this in the future.
Do you have a reverse split planned? Nothing is planned at the moment.
Ironclad presents an opportunity because of their military grade encryption. This is something that could be appealing to combine with Data 443's tech stack to pitch to someone like a bank who doesn't want standard grade encryption. Vise Versa. Ironclad has the encryption aspect but lack in the transport or display capabilities so Araloc as example could be used with the ironclad encryptions.
Other acquistion pending soon does a lot of data movement between organizations. So claim to fame they handle all the batch transactions for a major credit card firm and distribute it to 13 different banks deep in their network. Someone like that would be able to use Ironclad tech stack to encrypt that transport.
Size of the customer base: The have 400 named customers on the books. 20,000 wordpress users. Expecting 50000 at the end of this year. Next acquisition has 4000 active enterprise customers.
Have you convinced any cross selling between customers?
Renewals guy from arcmail is comped more right now for upsales/cross sales than he is on arcmail sales currently. They have a full sales team working on it right now.
Again this is my interpretation, but Jason is certainly showing that he is building for a bright future here. We need a few of the old LDSR shell issues to be resolved but once they are, I believe the sky is the limit for this growing startup!