As it prepares to ramp up for a multimillion-dollar project with the Department of National Defence, Kwesst Micro Systems is turning to one of the country’s best-known former soldiers to help chart its future course.
The Kanata-based firm recently announced that retired Gen. Rick Hillier, who was chief of the Canadian defence staff from 2005-08, has joined its board of directors.
Hillier, who had previously worked with Kwesst as an adviser, will also chair the company’s strategic planning committee following the retirement of Jeff MacLeod, who co-founded the organization in 2017.
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“There’s no better person who can help us with that task than Gen. Hillier,” chief executive Sean Homuth said, explaining that Hillier’s experience as Canada’s former top-ranking military officer gives him the “ability to see down the road in terms of what’s next in defence and really just staying ahead of what the modern threats are.”
Expanding Hillier’s role is Kwesst’s latest move to shore up its leadership group as it seeks to capitalize on growing demand for its technology.
The latest announcement comes less than a month after Homuth was appointed CEO. A finance expert who has worked with a range of public and private companies in a career spanning more than two decades, Homuth joined Kwesst as chief financial officer earlier this year.
Homuth’s resume includes stints with large organizations like the Royal Canadian Mint as well as a number of small startups. His family has deep military roots, and Homuth jumped at the chance to work in the defence sector alongside longtime industry insider David Luxton, who serves as Kwesst’s executive chairman.
“I never served, but it’s part of my heritage and one of the reasons we’re passionate about the mission here,” he told Techopia.
“David and I share a very similar approach to building a business. I really got a sense that the company is at a pivotal turning point where it’s commercializing all the great technology that it’s developed. The idea of jumping in, helping to build a business again, was really something that attracted me.”
Kwesst specializes in three main product lines – 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.
Twelve months after making its debut on the Nasdaq, the firm has taken some big steps forward in 2023.
Last spring, it signed a five-year contract with DND to perform software systems engineering work in a joint venture with two other partners that is expected to bring it at least $4 million annually.
The company is in the midst of adding 11 new employees to work on the DND project, pushing its headcount north of 30. Meanwhile, Homuth says Kwesst is bidding on a series of other contracts with other “global prime defence” organizations that would give it a more predictable revenue stream.
New SaaS offering
Kwesst’s product lines are also evolving to keep up with changing customer needs, Homuth added.
For example, the firm is introducing a new 40-millimetre cartridge for its third-party riot control launchers that it claims is more accurate than products now available on the market.
In addition, Kwesst is developing a subscription-based “command-and-control” platform with software that allows first responders, law enforcement agencies and other clients to instantly communicate with each other, view camera footage from drones and other devices, and track movements of personnel in real time.
It’s all part of Kwesst’s long-term strategy to diversify its revenue streams as it looks to deliver on its early promise, Homuth explained.
“I think that this will be a very different company in 2024,” he added.
Still, Kwesst remains a work in progress.
While its revenues rose 35 per cent year-over-year to nearly $630,000 in the first nine months of fiscal 2023, the firm continues to bleed red ink as it spends significantly more on marketing and R&D than it brings in. Kwesst’s accumulated losses through the first three quarters of the year totalled almost $7 million.
But Homuth said he believes Kwesst’s long-term future is bright – as long as it sticks to its knitting.
“At the end of the day, it’s really important for a company that’s at this turning point to have laser-like focus,” he said. “It would be easy to chase the newest things … but what we’re trying to do is build the next billion-dollar defence company here in Ottawa. It’s really important that we stay focused.”
