An Ottawa startup has signed a multimillion-dollar deal with the Department of National Defence that could see it increase its revenues more than 450 per cent from a year ago.
Kwesst Micro Systems said Tuesday it has been awarded a five-year contract to perform software systems engineering work for DND in a joint venture with two other unnamed defence industry partners. Kwesst will earn at least $4 million annually for its portion of the deal, which also includes five one-year options.
The company said it will provide “specialized software development and integration solutions” to the Canadian Army under the agreement, which runs until May 2028.
OBJ360 (Sponsored)
Ottawa’s housing inventory gets a boost with the Talisman Apartments
It’s not easy to find a welcoming, comfortable home within budget for many of Ottawa’s young professionals. But Sleepwell Property Management has entered the market with an optimally located, attractive
Giving Guide: The Anglican Diocese of Ottawa
What we do The Anglican Diocese of Ottawa (ADO) focuses on compassionately caring for vulnerable people. Our ministries are dedicated to supporting those struggling with poverty, mental illness, addiction, and
Kwesst executive chairman David Luxton said the contract win represents “an important validating milestone” for the organization, which has about 20 employees.
“Today’s announcement, coupled with other pending opportunities, is a pivotal development in our strategy to ramp up revenue and multi-year backlog into 2024 and beyond, for a predictable base of business centred on our digitization capabilities,” Luxton said in a statement. “This is therefore a very important and exciting juncture for the company.”
Founded in 2017 by former Colt Canada executives Jeff MacLeod and Warren Downing, Kwesst specializes in three main product areas – systems that feed real-time information to soldiers in the field; measures that counteract deadly lasers and other space-age weaponry; and equipment such as high-tech anti-riot munitions designed to subdue aggressive protesters and other belligerents.
The company, which went public on TSX Venture Exchange in 2020 and previously traded on the New York-based OTCQB exchange, debuted on the Nasdaq exchange late last year in an effort to boost its access to capital markets in the U.S.
Kwesst generated about $722,000 in revenues in fiscal 2022, down from nearly $1.3 million the previous year, while posting a net loss of more than $10.5 million.
In its fiscal 2023 first quarter ending Dec. 31, the company had sales of about $317,000 and recorded a $2.2-million loss.
Its shares have fallen nearly 90 per cent in the past 12 months but were up 22 cents, or more than six per cent, to $3.60 in late-afternoon trading on the TSX Venture Exchange on Tuesday.
