Netlinkz stays focused on global market opportunity as revenues climb
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The company is taking a sophisticated distribution approach by partnering with key players in major market jurisdictions.
For high-growth network security software company Netlinkz (ASX:NET), 2021 is all about driving growth in new global markets
With its proprietary VSN (virtual secure network) offering, NET has already established strong recurring revenues in its core markets, where it booked more than $5.2m in cash receipts during the December quarter.
And speaking with Stockhead this week, CEO James Tsiolis provided details around the company’s international expansion strategy as it prepares to scale up.
While global distribution is important, Tsiolis highlighted that Netlinkz’s recent growth is underpinned by the competitive advantage of its VSN – a proprietary platform that facilitates secure data transmission direct from cloud networks to ‘edge’ devices such as mobile phones, tablets, personal computers and IoT devices.
The company gained an early foothold in the Chinese market, which saw revenues climb almost nine-fold last year to $5.25m.
“We know that we’ve got a very good product. The last two years in particular have been a turning point in terms of demonstrating scalability,” he said.
“That’s what’s allowed us to win these key projects and we’ve got some very significant corporate customers. The focus now is on building revenues in the rest of the world.”
On that front, Netlinkz landed a key distribution deal last month when it announced it had entered a strategic partnership for the European Market with Uni Systems Information Technology.
Headquartered in Athens, Greece, Uni Systems gives Netlinkz a competitive advantage not just in product development, but also as a critical gateway to the broader European market.
“They’ve already got a market footprint in Europe where they’re a leading distributor of major cloud platforms like (Microsoft) Azure and Amazon Web Service,” Tsiolis said.
“So it aligns perfectly with what we need to do as a company, which is to be part of an integrated solution.”
As a measure of the strength of the agreement, Uni Systems will incorporate Netlinkz’ VSN technology in its on-site Internet of Things (IoT) lab, to test market fit for different customers in the European marketplace.
The Uni Systems deal follows on from a separate strategic partnership signed last December with the Malaysian based LNS International, which gives Netlinkz a dedicated sales and distribution presence across Japan and South-East Asia.
The company also signed a separate Master Services Agreement (MSA) last year with Natsoft Corporation (Natsoft), to provide a point of access for the huge Indian market.
Similarly, in that deal Netlinkz established a joint IoT lab in Hyderabad, India, with Natsoft where it can workshop product details uniquely fitted to the local market.
And for Tsiolis, it forms part of a strategy to leverage strategic partnerships to drive growth.
“Just walking in the door with no introduction can be difficult. What these deals allow us to do is integrate with the right partners so that we’re able to go to market faster,” he said.
And the quicker it gets new distribution channels, the quicker it can drive global recurring revenues from the VSN product – where it already has a market-leading competitive advantage.
“The critical aspect to note on the product side is that we’ve got a secure data transmission solution that can route connections from the cloud to all devices – laptops and mobile phones – at much faster speeds than our competitors,” Tsiolis said.
“And in terms of customer acquisition, all a client has to do to join a branch, user or device to their VSN network is go on any of the major app stores and download the software. That’s a very difficult thing for (a competitor) to replicate.”
That’s where Netlinkz’s “real edge” lies, Tsiolis said. And by localising its product for each market, it has a unique opportunity to generate global revenues from Australian-made software.
“But you can’t just walk into any market and say, ‘here I am’. You’ve got to be smart in the way you approach it,” he said.
“In a way it’s similar to a reseller model, but we’re just being a bit more sophisticated about distribution.”
This article was developed in collaboration with Netlinkz, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.