In this Research Note, we examine the Norwegian biometrics specialist, Zwipe and its shift in strategic direction to focus solely on access control, announced on 16th January 2024. This article is based on their webcast presentation, 2022 annual report and selected announcements throughout last year.

Founded in 2009, Zwipe AS is a technology supplier of biometric payment and access cards, based in Oslo, Norway, with a presence in 10 countries. The company is listed on the Euronext Growth Market on the Oslo Stock Exchange and on the Nasdaq First North Growth Market in Stockholm.

Shift in Strategic Focus

Zwipe announced a new strategic direction in January 2024, increasing its focus on Zwipe Access and accelerating the commercialization of its biometric authentication technology in the access control market.

As a result of the change in strategic focus, the company has initiated a restructuring process that is expected to reduce operational costs, particularly related to Zwipe Pay, with 5 employees leaving the company.

Zwipe has historically focused primarily on the development and application of its biometric authentication technology in the payments market. However, the company has now concluded that neither market adoption nor the pace of commercial launches has materialized in the manner Zwipe had expected, particularly towards the end of 2023.

“Zwipe has seen considerable traction and progress in the access control market in 2023, with more than 30 partnerships signed or in progress in the USA and Europe. The market is in its early stages but we believe biometric cards can represent a substantial share of the nearly 500 million smart access cards expected to be shipped annually in coming years.” says Zwipe CEO Robert Puskaric.

Zwipe Access Go To Market Partnerships

In 2023, more than 30 Go to Market partnerships were signed or in progress in the USA and Europe with distributors, systems integrators and installers to accelerate deployment of biometric access cards.

On 9th October 2023, Zwipe partnered with Schneider Electric's Security Solutions Group, specializing in the integration of access control, video surveillance, intrusion detection, and other security technology sub-systems, to offer the "biometric system-on-card" solution to Schneider Electric's global customer base.

Zwipe's compatibility with virtually all access control manufacturers ensures integration with Schneider Electric's Continuum, Security Expert, and a wide array of other access control system providers.

Another major partnership was announced on 23rd October 2023 with TADERA to harness Zwipe’s technology for biometric smart cards specifically designed for access control at US airports.

Financials

Total reported revenue at Zwipe AS, was MNOK 3.4 in 2022 compared with MNOK 1.9 in 2021. Total operating expenses were MNOK 111.2 compared to MNOK 85.9 in 2021, and the net result for Zwipe AS was a loss of MNOK 107.4 compared to a loss of MNOK 84.3 in 2021.

The new strategic focus on Zwipe Access gives the company a faster path to profitability in the near and medium future. Even with lower top-line revenue, a combination of higher gross margin, a lower operational cost base, and lower supply chain cash outflows make a business focused only on Zwipe Access more financially viable and attractive.

One additional near-term priority in the second half of 2024 is to launch new products for technologies beyond HID Seos and Legic Advant.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.