Istana to build on SoftBank deal after $4 million raise
Perth-based surveillance software firm Istana AI has raised $4 million in an oversubscribed placement to continue its growth in key markets such as Japan and the Middle East.
The Kevin Brown-led company told the market today that it has received funding from institutional and sophisticated investors after developing self-learning AI software that detects unusual or interesting events in large surveillance networks.
Built for scale, its technology eliminates the need for human operators to watch thousands of video streams and the need for manual rule configuration on camera stream setup.
The offering was made at 3.2 cents per share, a nine per cent discount to the five-day volume-weighted average price, with approximately 125,000,000 new shares issued as part of the raise.
Kevin Brown, chief executive of Istana AI, said the oversubscribed placement shows investors have confidence in the company.
“This capital raise will help Istana AI accelerate its global growth strategy, particularly through growing our partner network and expanding sales capacity in key markets,” he said.
“With increasing demand for intelligent, automated security solutions, we believe Istana AI is well-positioned to capitalise on the significant market opportunities ahead and drive growth in recurring revenues.”
The company said the funds will also be used to continue the development of its Antara Core technology, which provides on-site server hosting for its AI monitoring software, rather than cloud-based services.
Istana AI Shares (ASX:ICE)
It’s a play that could deploy Istana’s technology in some of the most sensitive industries by offering more in-depth data security and sovereignty controls.
Templer Corporate acted as the lead manager for the placement.
Istana currently operates 19,000 cameras across more than 70 sites and 15 countries.
People like Lawrence Escalante and Worley Parsons founder Peter Meyers previously supported it.
The confidence from investors comes after a tumultuous year for the company.
Shares are currently trading at 3.5 cents a share, below their 2025 high of 5 cents a share.
The decline comes amid continued uncertainty over the future of its $1.7 million contract for Iraq’s Safe Cities project in Baghdad.
The contract was originally secured with HTE Electronics Trading LLC through 2025.
Under the agreement, Istana will provide its AI video analytics software to manage surveillance in the Iraqi capital.
But, in a statement issued to the market in September – and reiterated in the release of interim results in February – the company said there were concerns about the future of the project.
“Isetana AI has attempted to connect with HighTech to seek clarification and confirm the revised deployment schedule. The company has not yet received a response,” it said in September.
The project includes Isetana AI in its scope, but broader ecosystem dynamics still pose implementation risks.
“Based on the above, there is material uncertainty with respect to both the timing of the Safe City project and the ultimate realisation of revenues.”
Despite the Iraq contract problem, interim results published in late February were promising.
Recurring revenue increased 43 per cent during the first half to $1.3 million, while the margin also increased.
During the year, the parties also reached an agreement with Japanese robotics giant SoftBank Robotics Group Corp., launching a three-year research and development partnership.
The Japanese tech giant’s chief executive Kenichi Yoshida was added to the Aisatana board as part of that deal, while the Tokyo-based company also became the exclusive distributor of Aisatana AI in Japan.
SoftBank also became the second-largest investor in the company with a 17.6 per cent stake.
That agreement also gave Istana its largest domestic contract to date, a five-year, $376,000 deal with Millennium Services Group, a SoftBank-controlled security and cleaning service provider.
This month’s raise is the first since Perth billionaire Lawrence Escalante fully underwrote a $2.65 million placement in January 2025 through his Lance East office.
The increase was to aid the company’s expansion into Iraq as part of the Baghdad Safe City project; now there are concerns about the feasibility of the project that is being said.
In 2022, Mr Escalante, founder of VGW, first invested in Istana when venture capital fund Yuva Capital exited its investment.
His January 2025 underwriting increased his stake in the firm to 37 per cent from about 17 per cent.
His stake later dropped to about 30 per cent after the SoftBank deal.
Mr Escalante is believed to be related to Istana’s chief executive Kevin Brown, with Mr Brown having served in a number of key executive roles at VGW over a six-year period before joining Istana.
Curtin University – the institution from which Istana’s technology first originated – still holds a 3.5 per cent stake in the company.
Istana also has backing from Tokyo Stock Exchange-listed Meccanica Inc.
