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Eyes up as IXUP cracks the real value of data privacy
IXUP (ASX: IXU) – With hackers on the rise, their tools and techniques are becoming more sophisticated and harder to prevent, giving rise to a global cyber security market valued at US$167 billion ($223 billion). The number of “submitting vulnerabilities” – read, attempted hacking events -went up by 63 per cent in 2020, according to HackerOne’s 2021 Hacker Report.
That means data governance and security has never been more important than it is now. This is where IXUP (pronounced “eyes up”) has found a niche opportunity using cutting-edge technology to produce valuable data insights to customers, in a private and secure way, without exposing the underlying data.
The Inside Network spoke with newly hired IXUP MD Marcus Gracey about the company and its two recent acquisitions.
Firstly, let’s start off with a bit about IXUP. From what I understand IXUP develops software to help securely share and analyse data using encryption technology. Can you give me a dummy’s explanation of how the company operates?
There have been two consecutive acquisitions that have taken place rather quickly. Myself and Julian (non-executive chairman Julian Babarczy) came on board November last year, and we very quickly had to take a fresh look at the company, the market, what was needed to commercialise this product and bring it to market.
IXUP is a software platform that was built to analyse sensitive data and produce several reports and findings on this data that the client would find extremely useful. The data used in our platform is highly sensitive.
Can you give an example of this in practice?
Sure thing. We’re working with a major Premier League team as an example, and we’ve run a proof-of-concept.
During Covid, a lot of businesses were hit quite hard; one in particular is the sports and events industry. Both industries were largely closed for the entirety of last year. In the US in particular, sporting events in college were closed, costing huge sums of money. In the same way, there are a bunch of Premier League teams that have data on their members, ticket sales, online shopping sites, spending data and information from their online TV channel.
They’ve never been put together. We analyse this data using technology from our the first acquisition DataPowa (provides analytics to the sports industry). In addition to that, we got hold of an enrichment layer of data which is a layer of socio-economic data, and add it to the mix.
All of this is then loaded into IXUP, all encrypted of course, and analysed. At the other end, “insights” are produced and sent to the client. What we’ll see is a client saying ‘Wow, we had no idea the majority of our members spend the most money on this merchandise, live in this area and like this player. We can now target members a lot better because we now have advanced insights.’
There are a stack of sporting businesses that have big data assets that are sitting dormant. How do they commercialise this data they are sitting on? On the other hand, there is legislation that makes it difficult to commercialise because of privacy regulations. The solution? IXUP. It sits right in the middle and is a high-end solution that doesn’t compromise privacy. At all times, any data sets stay fully encrypted
The Data Republic acquisition; can you go through the announcement and how you were able to manage a 94 per cent discount to almost $50 million to deploy their assets?
We had just announced the acquisition of DataPowa. Julian and I were at a roadshow to explain the acquisition to shareholders and halfway through that day, we had a call from a close friend that an opportunity was up for grabs and an expression of interest needed to be lodged in three hours’ time.
So we went in to take a look at the offer that needed an answer in three hours, which is absolutely bananas. It took us four months to do the DataPowa deal.
Luckily for us, we knew the business inside out; they are our competitors, same customer base, both companies are well-known to each other. To be honest, we weren’t as successful as them. There was a lot of interest. It seems Data Republic ran into administration; it was a funding issue that they couldn’t service. It was a once-in-a-lifetime opportunity that we could move onto better than anyone else and quicker than anyone else. It was a $3 million opportunity that cost $50 million to build.
Have you been able to employ skills from Data Republic?
Absolutely. We’re in a lot of conversations, but the administrator still has control. But we’ve had to relocate to find a bigger office because we couldn’t house the number of staff we’ve grown to.
Outlook – Where do you see yourself from here on in? What’s next?
We’ll be bedding-down these two acquisitions and we’ll be running hard on that vertical. Part of the initial review when I joined last year was that there were long, complicated sales cycles when getting big multinational companies’, banks’ and telcos’ customers on board.
What was lacking was the ability to get our product to market and used, quick. DataPowa was good at securing multinationals rather quickly, which they did really well. They could secure customers quick. But they’re with us now.
Are there any other competitors?
We’re now the main player in Australia. It wasn’t planned this way, but opportunity knocked on our door and it happened very quick. We’re running with the sports data opportunity because of the characteristics it presents.
Firstly, it is big on innovation and change. The sports industry last year couldn’t earn revenue because of the pandemic. So now, this entire area is looking to monetise its data sets. A brand-new asset class is sitting there just waiting to be serviced.
We partnered with DataPowa as a collaboration. We worked out that they had a significant competitive advantage in that sports market. And through that we have discovered an even bigger opportunity. A ‘dark horse’ that is driving up the use of sports data, both here and in the US. It’s sports betting. Deregulation of the sports betting markets is driving it. DataPowa had captured this market, and Thank God we had the money to buy them. They already had customers all over the world. And now that we’ve got DataRepublic we can add to our suite of products. Keep your eyes peeled for a few announcements coming out soon.
If you join the dots, sports data is in demand for growing activity in that market. What is driving up demand is pricing is the opening up of sports betting in the US market. That’s what’s really going on. It’s an exciting space.
Thank you for your time, Marcus.
