One of Ottawa’s fastest-growing tech firms says it has a gateway into the lucrative European market after being acquired by a Spanish cybersecurity powerhouse.
Lightship Security announced Friday it’s been sold to Applus+, a publicly traded company based in Madrid that provides cybersecurity testing, inspection and certification services to customers in more than 70 countries. Terms of the deal were not disclosed.
Founded in 2015, Lightship automates the process of verifying that IT hardware such as switchers and routers meets rigorous government security standards before being sold to governments themselves.
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Lightship now has more than 30 customers, including tech giants such as BlackBerry, Cisco, Dell and Samsung, and the company has 40 employees at offices in Ottawa, Vancouver and Austin, Tex. The firm appeared on OBJ’s list of fastest-growing companies in 2019 and 2021 and has continued its upward trajectory during the pandemic, posting revenue growth of more than 230 per cent over the past three years.
But co-founder and president Jason Lawlor said he and business partners Greg McLearn, Brad Proffitt and Lachlan Turner realized they’d taken the bootstrapped startup as far as they could on their own.
Pursuing M&A offers
About 80 per cent of Lightship’s revenues come from U.S. customers, and the founders felt they needed access to more capital if they wanted to make headway in Europe. After looking at various options – including pursuing venture capital funding or debt financing – they decided to put the firm on the market last year with help from Ottawa-based M&A specialists Sampford Advisors.
Applus+, with its large customer base across the Atlantic, was the most attractive suitor, Lawlor said.
“It gives us an automatic toehold into the European market, which was huge for us,” he explained. “We fill a gap in their portfolio with our U.S. and Canadian accreditations. So it really was a pretty good fit for both sides.”
“It gives us an automatic toehold into the European market, which was huge for us.”
Lightship will remain based in Ottawa as a subsidiary of Applus+, and Lawlor and the other founders will continue to serve in their current roles.
“It’s business as usual for our clients,” Lawlor said. “This just gives us a broader portfolio of services and capabilities that we can offer them. I think it’s good news for our clients.”
Lightship says its product certification software, known as Greenlight, has distilled a process that used to consume as much as a year’s worth of manual labour down to less than a month.
With 5G networks rolling out, the company partnered last year with Ottawa startup Field Effect on a government-funded project to automate the cybersecurity certification process for mobile technology such as smartphones.
Lightship also wants to make its test automation software more widely available on a subscription basis – a step that should become easier thanks to its new owner’s deep pockets, Lawlor added.
“We had that planned, but when you’re bootstrapping it, it doesn’t go as fast as you want it to go,” he said. “I think it will definitely accelerate those development plans.