OpSec Group is a market leader in the management and protection of brands and intellectual property. It works with some of the world’s leading brand owners and rights holders. Recently, OpSec entered into a business combination agreement with special purpose acquisition company Investcorp Europe Acquisition Corp (NASDAQ: IVCB) to become a public entity. In a conversation with AlphaStreet, OpSec’s CEO Selva Selvaratnam provided insights into the company’s operations and upcoming public listing.
Can you provide an overview of OpSec and its operations?
OpSec Group is a global leader in intellectual property management (IP) and brand protection solutions, helping enterprises optimize, monetize, and protect the value of their intangible assets. Our range of technology-enabled solutions, managed services, and products span many of the essential aspects of managing IP and brands, from patent filings and trademark registration to brand licensing and product authentication. Approximately 5,000 of the world’s most recognized brands in media and technology, sports and apparel, and consumer and industrial products, as well as governments and financial institutions, trust us to manage and protect their IP portfolios and physical and digital assets.
Our story began with a focus on innovation and creating secure authentication measures for brands and governments worldwide. We saw the potential to expand beyond physical security and anti-counterfeiting solutions to enable an integrated, data-centric approach including supply chain optimization, online brand protection, licensing management, and engagement marketing. OpSec’s breadth of services and solutions is why we are an enduring partner to many of the world’s best-known brands. OpSec has evolved into helping manage the full lifecycle of IP and brands, which also positions us against some interesting adjacent markets.
How significant is the public listing, and where do you see OpSec five years from now?
Going public will enable us to accelerate our innovation for our customers, capitalize on our momentum, and drive M&A efforts. OpSec has already had a long-term relationship with the originators of the SPAC, Investcorp, and this proposed combination represents a significant phase of our strategic path forward as a business. Becoming a publicly traded company is the logical next step to supporting our development, with access to new sources of capital providing greater financial flexibility, in addition to the scale and resources to effectively execute against our ambitious business strategy.
There are three key trends that indicate an increasing need for solutions that OpSec provides. IP is growing, brands are changing, and threats are on the rise – which is why we believe there is such a compelling opportunity to work across the IP and brand landscape. Here are some specific data points that support our beliefs:
(1) the growth in intangible assets and IP Is significant (there has been a 1,145.0% growth in intangible assets value from 1996 to 2021, 3.4M patents were filed globally in 2021 which represents an annual increase of 3.6%, there were 13.9M trademarks filed globally in 2021 which represents an annual increase of 5.5%); (2) authenticity & sustainability is becoming increasingly important to consumers and brands (approximately 91.0% of consumers claim authenticity and integrity are critical in evaluating brands, approximately 85.0% of consumers state product sustainability is important in evaluating brands); (3) the costs of counterfeiting, piracy, and consumer fraud continue to escalate (the global value of the piracy and counterfeit goods market in 2022 reached $2.8 TN, the value of counterfeit and pirated goods in 2022 was between $1.5 and $2.0 TN, the value of digital piracy in movies and music in 2022 was between $342.0 and $761.0 BN).
Because OpSec’s technology and services cover the entire lifecycle of brand and IP brand protection, we are presented with many opportunities to cross-sell and up-sell to our current client base, and that’s where we will also focus our attention in the near- to medium-term future. We also have a significant runway for growth more broadly, through capturing a greater share of wallets and expansion into adjacent markets and capabilities, including through M&A.
Can you talk about your expansion plans; are there any M&A deals in the cards currently?
We aren’t able to mention specifics at this time. But, in terms of origination and execution, our strong management team has decades of experience and successful execution of M&A and integration. In April, we also completed our landmark acquisition of Zacco, a leading IP management services company with a heritage that goes back a century and a half.
Zacco takes us into new areas, such as patents and trademarks, which allows us to address new intangible assets for customers in our key sectors, such as the innovation agenda in high-technology companies. We are already starting to see the benefits of what a full lifecycle IP and brand solution can offer. With the visibility and enhancement Zacco brings to complex IP portfolios, we can bring greater integration and value, from the inception of IP and brand monetization strategies to downstream protection.
What are the emerging trends in the global intellectual property market, and to what extent OpSec is prepared to tap into new opportunities?
The value of global piracy and counterfeiting was an estimated $2.8 trillion in 2022, and continued growth in e-commerce, online content, and social media will only amplify the threats posed by counterfeiters, content pirates, and fraudsters. In addition, competition and complexity around intellectual property are only becoming more intense, as global brands compete around ideas, such as artificial intelligence, and followers, as in the case of global content and brands. As such, creating and protecting IP and brand identities has become one of the most critical priorities for leading enterprises. This is exactly where OpSec fits in, mitigating both legitimate and illegitimate threats.
An increasing amount of value is now accounted for by intangible brand value – formed from the IP itself plus the authenticity and trust built into products and brands. Several megatrends are driving growth in the principal markets that OpSec is exposed to, which to varying degrees are converging.
How do you look at the macroeconomic volatility, in terms of its potential effect on OpSec’s business?
The market is facing pressure from many directions, but we have to look further ahead if we want to scale OpSec, and our teams, and continue to drive our industry forward. Our focus is medium- to long-term and being a public company via a proposed combination with a SPAC provides us with a very robust platform for our growth strategy. We believe OpSec has the established revenue and momentum to succeed as a public company.