With its latest funding round, SMX is now well-placed to capitalise on its global market opportunity in the post-COVID economy.

For most companies globally, the disruption caused by the COVID-19 pandemic gave rise to some fundamental changes in supply chain management.

And those changes have resulted in a number of structural tailwinds for ASX-listed Security Matters (ASX:SMX) – the proprietary tech platform that digitises physical objects on the blockchain to enable a circular and closed loop economy.

In that context, the company announced a major new capital raise this morning to fund its next phase of growth, in the form of a A5.1M $ share placement that was heavily oversubscribed by existing institutional investors.

Company CEO Haggai Alon caught up with Stockhead following the announcement, to discuss the rational for the raise as the company scales up for its next phase of growth.

ESG impact shift

Assessing the structural shifts taking place in the global post-COVID economy, Alon highlighted the vast flows of capital moving into projects that meet ESG (Environmental, Social, and Corporate Governance) standards.

With its market-leading technology that can track and invisibly embed multiple layers of data in the actual material of the product and catalogue every step in the global supply chain across major industries such as plastic waste and sustainable textiles, SMX is perfectly positioned for that shift.

And it’s that positive trend that underpinned the company’s latest share placement.

“Towards the end of last year, I think it became clear to sophisticated investors that what we’re doing is really ESG-centric,” Alon said.

On that front, the company’s ESG strategy got key backing in November when it completed a $760,000 private placement to Psagot, Israel’s largest asset management and institutional investor.

“With this (latest) raise, what we’ve done is effectively round out the process of repositioning SMX for this global shift, and what we believe is the leading ESG impact platform in the market,” Alon said.

Fast forward

One of the key changes to come from the pandemic is that it’s effectively pushed forward changes to the economic landscape that may otherwise have taken 5-10 years, Alon explained.

In other words, the shift to sustainable solutions across almost every major industry is now at the forefront.

“What was nice to have has become essential,” Alon says.

“It’s now essential to be able to transform fast and set a path to being a sustainable in your processes, using higher rates of recycled content, and we have the answers for that.”

In addition, a tech platform like SMX sits “at the centre of that revolution, where manufacturing processes are moving from linear to circular production”, Alon said.

In that context, “our technology is one of the keys to this new paradigm”.

Investor backing

Along with the size of SMX’s latest cap raise, Alon highlighted the investors participating were existing shareholders excited by the company’s growth trajectory.

SMX will deploy the funds to further scale industrial solutions for clients who are actively   transitioning to the circular economy. As well as extending its global distribution base where it already works with a number of multinational clients across different industries.

“I think the fact it was oversubscribed and backed up by current shareholders, and the fact that they chose to invest heavily at this stage of our growth cycle is an important vote of confidence in the way the company’s going,” Alon said.

This article was developed in collaboration with Security Matters, 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.

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