Finansavisen: investment fund backs Skytale's acquisition potential

Finansavisen reports:

Skytale has developed a secure communication solution and attracted some of Norway’s largest companies as customers.

Original quotation in Norwegian

– Målet er 2-300 millioner i omsetning innen et par-tre år, sier daglig leder Kenneth Lie.

Original quotation in Norwegian

– Vi vet at store selskaper bruker Whatsapp, Signal og Messenger til å kommunisere. Problemet er at mange av de kjente applikasjonene kan leses av andre, sier daglig leder Kenneth Lie i Skytale.

The increasing threat of cyberattacks and a lack of alternatives have led the start-up, managed by Lie and Julie Winther-Larsen among others, to see an opportunity in secure communication.

Skytale has developed an entirely Norwegian end-to-end encrypted communication platform that the company describes as watertight.

Investment fund Kongsberg Pre Såkorn was among the investors that acquired a stake in December through a NOK 7 million funding round valuing the company at NOK 40 million before the investment. DNB has also contributed financing.

The aim is to become the largest provider in the Nordic region quickly. To reach critical mass, the company is looking for a larger partner.

Original quotation in Norwegian

– Vi kan fort bli en god oppkjøpskandidat, og har fått konkrete henvendelser fra store teknologiselskaper. Målet 2-300 millioner i omsetning innen et par-tre år, sier Lie.

Security at the foundation

According to Winther-Larsen, Skytale’s platform with multiple encryption layers is designed to meet the strictest security and privacy requirements of Nordic security authorities. Some of Norway’s largest companies have already joined as pilot customers, and the company has an ongoing collaboration with Telenor.

Original quotation in Norwegian

– Norske virksomheter har vært litt naive, men forståelsen for sikkerhet er økende. Det er et før og etter Ukraina, poengterer Winther-Larsen.

The team has varied backgrounds. Winther-Larsen has experience from the Naval Academy and special forces and holds a master’s degree from NHH, with expertise in operations and security. Chair Rune Roberg and Jan Ivar Øyulvstad specialise in server solutions and cybersecurity, while CEO Kenneth Lie has a background in IT project management and classified procurement.

Functionally, the platform is intended to work like other foreign applications, while protecting privacy and the integrity of communications by preventing Skytale from seeing customer data and metadata.

Who developed the technology is central to the sales argument. Given the geopolitical situation, Winther-Larsen believes corporate responsibility and values require companies to think more carefully about what they communicate and where.

Original quotation in Norwegian

– Vi er helnorske, bruker kun norske underleverandører og har en «zero trust»-arkitektur slik at selv ikke vi kan se kundens metadata, sier hun.

Original quotation in Norwegian

– Det er behov for en nordisk tjeneste og felles løsninger blant NATO-allierte, uten at det betyr at vi skal dele all informasjon med alle vi er allierte med, sier Lie.

Skytale

• Develops and sells secure business communication tools adapted to the strictest requirements of Nordic security authorities.
• The team’s backgrounds include special forces, security, server solutions, cybersecurity, IT project management and classified procurement.
• Raised NOK 7 million in December from investors including Kongsberg Pre Såkorn, in a round valuing the company at NOK 40 million.
• Aims for annual revenues of several hundred million kroner within a few years and is seeking a larger technology partner.

Raising more capital

The company is ready for commercialisation and has 20 employees in development and sales, with monthly cash expenditure of NOK 2 million.

It therefore plans to raise a substantial amount after the summer to scale the organisation. Lie remains confident despite a difficult capital market.

Original quotation in Norwegian

– Markedsresponsen har vært veldig god, og nåværende investorer har sagt de ønsker å være med videre. Derfor er vi på jakt etter kunnskap og kompetanse som kan ta selskapet videre, sier Lie.

Winther-Larsen and Lie acknowledge that a major challenge in cybersecurity is that security often comes at the expense of usability. They say the solution is designed to be easy to use.

Original quotation in Norwegian

– Utgangspunktet er at ansatte skal kunne kommunisere trygt uten å måtte bekymre seg for sikkerhetsaspekter. Brukervennlighet er helt avgjørende, men det er bedre å starte med sikkerheten enn å komme med det i ettertid.