Starcom signs supply and support deal with Shiptek

Wireless remote tracking and monitoring solutions developer Starcom announced on Thursday that that it had entered into a three year supply and support agreement with Shiptek Solutions Corporation - a Philippine software company - for the supply of its 'Tetis R' container tracking system.

The AIM-traded firm said that under the agreement, Shiptek committed to purchase a minimum of 2,900 Tetis R units over three years for a total sales value of $1.2m, and placed an initial order of $42,500 for 100 units.

It said the minimum order commitment for the remaining 2,800 units was phased as to 800 units in 2018, 800 units in 2019 and 1,200 units in 2020.

In addition to revenue from sales of units, the company would also provide its online tracking software system, which would generate software-as-a-service revenues of an average of $5 per month per unit.

For the minimum volumes, it was expected that SaaS revenues over the three years would be approximately $250,000.

The Tetis R system tracked shipping containers, Starcom’s board explained, and monitored temperature and humidity within the container remotely and in real time.

It said the Tetis R product was targeted primarily at companies wishing to monitor the environment of their products in transit, such as pharmaceutical, tobacco and food distribution companies.

“This is a major breakthrough for Tetis in terms of the volume potential as well as the endorsement effect,” said Starcom CEO Avi Hartmann.

“We are delighted to be working with Shiptek who we have found to be a highly innovative company and, as they sign up more shipping companies, volumes for Tetis can dramatically exceed the minimum order they committed to contractually.

“We believe we will enjoy a long and beneficial relationship with Shiptek and look forward to working with them.”