SenSen Networks (not yet listed)
A few years ago the University of Technology Sydney hired tech boffin Subhash Challa to inject a little entrepreneurial flair into the thinking of its students.
One would have to say he succeeded, because three years later the youthful professor quit to focus on commercialising SenSen, an internet of things play based on a platform developed within that centre of learning.
SenSen, which is raising $6.5 million of capital ahead of a back door listing, even has existing clients including NSW Roads and Maritime Services (RMS), Crown Casino and Abu Dhabi Airport.
SenSen, which apparently means “a thousand times a thousand” in Japanese, is about software that extracts data from video cameras in real time. The resulting data means faster decision-making and automated processing for customers.
SenSen may well become a friend of investors, but it’s a foe of speeding motorists and parking transgressors.
In 2011, SenSen won RMS as its first commercial customer, to operate its emerging network of “point-to-point” cameras (motorists are booked if their average speed over a given interval exceeds the speed limit).
“We came from nowhere to win a significant slice of that market,” Challa says. Listed speed camera operator Redflex is a notable rival in that market.
SenSen then modified the product for parking enforcement and it is used by a number of local councils.
The company also monitors double yellow-line offences for the Singapore’s Land Transport Authority and has the mandate for camera-based security at Abu Dhabi Airport, as well as Colonial First State’s local shopping centres.
It also counts passengers getting on and off Sydney’s ferries.
Challa says the company had so many proposals that it decided to focus on the speed and parking markets – that is, before another opportunity knocked.
“Crown heard about us and called us,” Challa says. “They wanted to understand patron and staff behaviour at the tables.”
SenSen modified the product, now called SenGame, to extract data from table cameras such as occupancy rates, hands per hour and bet types. SenGame is used on 200 tables at Crown’s Melbourne money den and is likely to be expanded to Crown’s Burswood facility in Perth.
Given Crown helped developed the product, Crown gets a royalty if other casinos adopt the product.
SenSen’s revenues have been modest to date: around $500,000 in 2014/15, $1.1 million in 2015/16 and a likely $2 million in 2016/17 (subject to audit).
In the case of the point-to-point stuff, revenues are based around an up-front and ongoing licence fee, while parking is based on an annual licence plus a payment that depends on the volume of infringements. The casino work is based on a monthly per table fee.
The listing is based on the shell of Orpheus Energy, an Indonesian coal explorer that gave up the game citing “less than favourable conditions.”
As with most tech plays, success will depend on who has the most useful mousetrap rather than the most high falutin’ innovation.
The capital raising is based on a $5 million general offer and a $1.5 million share purchase plan, both at 10 cents a share.
The offer closes on September 18 with a view to an October 3 listing.
Brainchip (BRN) 18c
Brainchip is same but different to SenSen, but has a similar interest in gambling (so to speak). In terms of pervasive and all-knowing surveillance, it’s similarly Orwellian in tone.
Brainchip has devised a product, Brain Chip Studio, that will strike fear into anyone with evil intent: camera facial recognition.
Brainchip’s IP is based on the esoteric yet in-vogue notions of spiking neural networks and neuromorphic computing. Ask your teacher about those ones.
An addendum to security cameras, Brain Chip Studio has the ability to recognise thousands of faces in seconds, with the key appeal to authorities tackling anything from terrorism to soccer hooliganism.
BrainChip is currently being used by the French Homeland Security department, which has a bit of work on its hands these days, and is also being trialled by the French National Police in Toulouse.
In casino settings, the technology has already been used to identify card counters: undesirable punters who always win because they can memorise what cards have been dealt.
The casinos are also interested in detecting the “good” punters and rewarding them for their loyalty.
Brainchip’s technology, devised by entrepreneur and Brainchip chief technology officer Peter Van der Made, is another extension of machine learning that threatens to make clutzy human brains redundant by about next Christmas.
“It’s all about recognising repeated patterns without being taught to do so,” says CEO Louis DiNardo. “A face is little more than a pattern.”
Brainchip is involved in discussions or trials with 17 casinos in what’s estimated to be a $250 million global market.
But the bigger opportunity lies in anti-terrorism and civil surveillance, a circa $500 million market globally.
Brainchip listed in September 2015 in a reverse takeover by Aziana Ltd, raising $4 million at 15.7 cents apiece. It then raised a further $4 million in April last year and $6 million in a placement last June (at 15 cents apiece).
So it’s been back to the well more times than a thirsty camel, not that that’s unusual for a minnow.
In the June half Brainchip generated US$369,000 (A$482,000) of revenue, mainly from a currency gain and residual oil and gas royalties. The US$133,000 of revenue was sourced mainly from the acquisition of French artificial intelligence outfit Spikenet Technology for $790,000 in mid 2016.
With cash of US$4.5m and expected current quarter cash burn of $1.778 million, Brainchip looks adequately funded. But it only takes a conventional noggin to work out that Brainchip will likely have to raise more capital in the near future.
Tim Boreham authors The New Criterion
Tim.boreham@independentresearch.com.au
