Kape Technologies (LON:KAPE) have told the market on Monday that it has had a successful 2019 as shares have jumped.

Shares in the firm trade at 171p (+6.52%). 20/1/20 13:36BST.

Kape is a leading ‘privacy-first’ digital security software provider to consumers. Through its range of privacy and security products, Kape focusses on protecting consumers and their personal data as they go about their daily digital lives.

The firm said on Monday that it is expected to report a rise in earnings and revenue for 2019 driven by organic growth and acquisitions.

Kape said “2019 was a pivotal year for Kape, during which the Group achieved both strong organic and inorganic growth. Delivering on its vision to create a dominant player in the privacy and security space, Kape acquired Private Internet Access (“PIA”) in December 2019, bringing one of the most respected product suites and well recognised brands in the market into the Group.”

For their financial year, Kape expects adjusted earnings before interest, taxes, depreciation and amortisation to be $14.5 million, up 40% from $10.8 million the year before, on revenue which is set to grow to by 27% to $66.0 million.

The firm said that revenue growth reflected its focus customer acquisition investment for its higher margin Digital Privacy segment.

Looking ahead, Kape is focused on integrating PIA, and enhancing the group’s growth by developing the product suite and consolidating its operations.

Ido Erlichman, Chief Executive Officer of Kape, commented:

“In 2019 we transformed Kape into one of the most prominent global digital privacy companies, combining rapid organic growth with further expansion of our portfolio through development and the PIA acquisition.

“The enlarged group boasts an enviable product suite of privacy-based software solutions focused on browsing, encryption and connectivity, in addition to a strong global brand within the fast-growing digital privacy arena.

“We have entered 2020 in a very strong position, focused on driving earnings growth and maintaining our historic levels of strong cash generation, alongside maximising the positive impact of our acquisitions.”

Kape build on November deal

In November, the firm told shareholders that a deal was agreed to purchase Private Internet Access (PIA).

PIA, which was established in Colorado in 2009, specialises in so-called virtual private networks (VPN), which allow users to set up an encrypted internet connection.
“This is a game-changing moment in Kape’s development,” said Kape chief executive Ido Erlichman.

“This transaction will be transformational for our business, enabling Kape to aggressively expand our footprint in North America, broaden our product offering, further strengthen our recurring revenue base and gain access to an extremely rich pool of talent.”

Kape expects the deal to boost earnings by 90% by the end of 2020, with the new titan set to report revenues between $120 million and $123 million.

As part of the deal, LTMI’s management will join the London firm, with chief executive Ted Kim taking over the combined company’s operations in North America.