HUB Security posts first half results as SPAC deal closing nears
HUB Security, an Israeli company working in the areas of confidential computing, cybersecurity and post-quantum cryptography (PQC) this week reported it had achieved NIS 122.5 million (U.S. $36.1 million) in revenue during the first half of 2022 as the firm awaits the closing of its proposed merger with Mount Rainier Acquisition Corp., a special purpose acquisition company (SPAC).
The company also said it expects to meet its full-year revenue goal of about U.S. $115 million, and achieve profitability this year, even though it reported a net loss for the first half of the year. It said much of the less could be attributed to the costs of executing the merger.
After a handful of mergers between pure-play quantum firms (IonQ, Rigetti, D-Wave) and SPACs, Hub Security’s deal with Mount Rainier may be the next quantum-relevant one to watch. After being announced in early 2022, it is expected to close in the fourth quarter of this year. The merger mates recently submitted an F-4 prospectus to the U.S. Securities and Exchange Commission regarding the merger and eventual NASDAQ listing at a U.S. $1.28 billion market capitalization.
Prior to the earnings report, IQT News spoke to Eyal Moshe, Founder and CEO of HUB Security about the SPAC merger and the company’s quantum aspirations.
IQT: What is the latest update on the SPAC merger and Nasdaq listing, and will the proceeds from the deal allow HUB Security to invest more in the quantum space?
Eyal Moshe: The HUB and Mount Rainier merger is on track and going according to plan… M&A is an imperative part of HUB’s growth strategy, and we’re continuing to look at the level of demand and evolution of the market as we plan our next steps. Quantum is definitely something we’re looking into.
IQT: What are your plans for offering post-quantum security, and will you support the standards now emerging from the National Institute of Standards and Technology?
EM: Built-in quantum random number generation (QRNG) enables our solutions to generate truly random numbers used in random key generation. HUB Security’s solutions will support NIST’s post-quantum algorithms once they’re officially approved. Additionally, should one of them ever be rendered obsolete or be hacked/broken, HUB will seamlessly swap the algorithm with an alternative one or algorithm standard that a HUB client wishes to use. In fact, this capability exists even now. This allows, for example, government or defense to load any type of algorithm. HUB Security’s platform integrates with quantum key generation (QKD) systems to allow the generation of the same random bit in two locations, allowing the use of pre-shared key operations and eliminating the need for key exchange algorithms.
IQT: HUB Security achieved FIPS 140-2 Level 3 certification in the U.S.. How significant will it be in winning business from enterprise organizations and government agencies?
EM: FIPS 140-2 Level 3 is an important milestone for HUB Security. It is one of the highest standards in cyber security and Level 3 is definitely at the high end of this scale by U.S. standards. We believe it will help expose the US market to what we do and will assist with building trust. The process of achieving FIPS 140-2 Level 3 certification is a thorough one. NIST has the highest standards in the global markets for cyber security and HUB Security’s application was a seamless one, mostly due to the soundness of our fundamental product design architecture and security levels, i.e. full compatibility with FIPS requirements.
IQT: Can you compare your approach to PQC start-ups like SandboxAQ, Cryptomathic, PQShield, and talk about what makes HUB different?
EM: HUB Security uniquely uses a more in-depth approach to confidential computing by securing and isolating the entire computing stack. The companies mentioned in the question above focus on encryption solutions and as part of their offering, they are expected to support post-quantum algorithms. Simply put, HUB can and possibly will load/support all these algorithms and more on its platform.
HUB’s uniqueness is further enhanced based on our ability to integrate multiple approaches to quantum security- QRNG, QKD and PQC. Other vendors are introducing capabilities in a piecemeal fashion, meaning they only apply quantum security to the network layer or app layer while HUB uses quantum with confidential computing to protect the entire computing stack. Additionally, our customers already receive a field-proven end-to-end confidential computing solution that is fully upgradeable to all future quantum-proof technologies.
Taking a broader view of the market, similar trends to HUB’s can be identified in the hyperscalers – Google, Amazon, and Microsoft. They presented intentions to realize quantum and/or post-quantum capabilities in their wide range of products and services. This approach will integrate the post-quantum techniques (mainly encryption) as a centrally managed service for their various products. The hyperscalers and HUB Security share remarkable similarities in the approach toward quantum utilization: A broad range of security building blocks are woven together to realize a high-end cybersecurity solution.
Dan O’Shea has covered telecommunications and related topics including semiconductors, sensors, retail systems, digital payments and quantum computing/technology for over 25 years.