The Moonshot Series: Plurilock Security stock
This article is part of our moonshot series — where we dive into the of achieving 100 bagger returns. Subscribe to our newsletter to get updates on new releases.
Company: Plurilock Security
- Market cap: $37m CAD
- Exchange—Ticker: CVE:PLUR
- Exchange—Ticker (US): OTC:PLCKF
Catch me up: Plurilock is a Canadian-founded cybersecurity company with operations in the US — offering multi-factor authentication software to companies. Its core products, Plurilock ADAPT and DEFEND uses behavioral biometric authentication for identity verification and to detect fraud/suspicious behavior.
- Unlike traditional ways to detect hackers, behavioral biometric authentication uses variables like your typing speed, typing patterns and other behavioral metrics to identify users.
Plurilock’s tech was created out of the University of Victoria in British Columbia, Canada.
- In 2008, Plurilock, the company, was formed with the university licensing the tech back to the company.
- In 2015, a new group of investors took over the company — implementing a management team to take the company beyond a research project.
Why now? Plurilock spent years developing its software and has recently ramped up its sales team by acquiring Aurora Systems Consulting in April 2021.
- The acquisition essentially turbocharged Plurilock’s sales efforts — by giving it access to over 140 tier-1 organizations to cross-sell its product and a sales team.
Just like that, Plurilock went from a company in its R&D phase to a company with a sales team ready to push to sell. A month after the completion of its acquisition, Plurilock announced several sales contracts with the government organizations and financial institutions including:
- The US Department of Homeland Security
- Canada’s Department of National Defence
Plurilock is targeting the government, financial services, and healthcare sector — three of the sectors with the heaviest need for cybersecurity. Total contracts received since April total over USD $10.2m in sales earned over several years.
After having only generated $460k sales in 2020 (pre-sales efforts phase), Plurilock’s existing contracts points at sales that are about to take off. Another important point is the company’s high gross margins — upwards of 80% from its software products.
The industry: While the broader cybersecurity market was valued at $156 billion in 2020, the behavioral biometric authentication industry was estimated to be much smaller at $870m in 2019.
But the industry is expected to grow at 25% per year between 2020-2027 into a $5 billion industry.
The entire cybersecurity industry is expected to benefit from the following trends:
- Increased need for cybersecurity solutions as more companies adopt work-from-home mandates post-COVID.
- Biden’s executive order to improve national cybersecurity in the US to increase protection of government networks
- Increased high profile hacks in the past year that has impacted
The risks: Like all companies in our moonshot series, Plurilock is a micro-cap company with a CAD $37m market cap. The company only made $460k in sales in 2020 and is very early in the company’s life.
But having signed over 20 contracts in 5 months worth USD $10.2m with several worth over a million dollars each — is a very good sign.
- But what we don’t know is when these contracts will be recognized on its financials and over how many years.
- If the company can continue to win contracts at this pace, the company could see its valuation rise.
While it’s difficult to gauge what Plurilock is worth after earning these contracts until we see its earnings reports in the coming months. We see several upside scenarios with Plurilock:
- Command a higher valuation as a high-growth, high-margin software company.
- Lack of coverage in the media and institutional following could lead to higher prices as more investors learn of the opportunity.
Assuming the sales from its contracts are realized over 3-4 years, Plurilock should in theory be worth significantly higher than its $37m market cap — relative to other high growth companies in the Canadian Venture Exchange.