YPB makes major breakthrough - now one step closer to commercialisation

YPB Group (ASX:YPB) is one step closer to commercialisation, following the announcement a major technical breakthrough in the development of its Motif Micro technology.

Micro Motif is a multi-patented, high security, invisible to the eye smartphone readable anti-counterfeit technology. It acts as an embedded covert tracer for YPB’s ProtectCode product – the company’s highest security anti-counterfeit product.

In a world-first technical achievement, YPB achieved smartphone readability of a high security authentication mark under “real world” conditions.

This breakthrough sets YPB up for commercial launch of its smartphone authentication solution in H2 2019.

The following video illustartes how micro motif works.

The commercial launch of this technology will open up mass consumer goods markets to YPB, who will be able to offer brands direct consumer engagement powered by assured product authentication

Final stage testing of Motif Micro, otherwise known as MM1, has been a primary focus of the company recently and YPB expects significant potential to license as well as attract early adopters as soon as the first commercial release is technically possible.

YPB expects MM1 to be commercially ready by the end of the year, with smartphone readability of high integrity authentication marks deemed as a generational technical leap with mass-market applications.

This is all made possible through the combination of YPB’s next generation rare earth tracer material, Motif Micro1, and the ProtectCode smartphone app.

The breakthrough has enabled YPB to transcend first iteration readability issues including the requirement of a smartphone to be held flat against the surface being scanned to exclude extraneous light. YPB’s ability to sell ProtectCodes is now no longer limited.

The following demonstration shows the new MM1 iteration in action.

Together with existing and potentially new channel partners, YPB has been pre-marketing the solution to significant brands and the company says interest is high.

The key technical advances that have been made are:

• Successful confirmation of authentication mark with unmodified smartphone;
• Capability to scan at a distance;
• Smartphone readability under normal artificial lighting; and
• Readability even when printed on curved surfaces, such as bottle caps and labels.

“I’m extremely proud of this tremendous leap achieved by our technical team led by Dr Paul Bisso. For years, I’ve described smartphone readability of a high security authentication mark as the Holy Grail of anti-counterfeit as it potentially arms vast numbers of consumers to become product authenticators. It can be deployed immediately and comprehensively at negligible cost via the ubiquity of smartphones,” YPB Group CEO John Houston said.

Technical breakthrough

The ability of the new technology is quite remarkable. The tracer material used in the solution is YPB’s next generation of proprietary rare earths.

The “smarts” for the ProtectCode app heavily leverage machine learning and now reside in the cloud (not on the phone). YPB can’t stress enough how much of a technical feat this is as it leverages highly advanced IT technology — it uses a custom-trained machine-learning model running on AWS SageMaker.

This company notes that the first iteration of the ProtectCode app is currently running only on IOS, however it believes adapting it to android is a very modest undertaking.

YPB also believes that because confirmation of product authenticity is a powerful trigger to engagement, brands will highly value the direct consumer engagement and product safety, YPB’s technology presents.

This has become increasingly so given the growth in remote Pan-Asian export customers, the decline of traditional marketing media and increased questioning of the effectiveness of spend on the two prominent digital channels.

Ease of use has always been a tell-tale sign for the success of a product and YPB understand that consumers will willingly scan a product with their smartphone to confirm its authenticity.

A further benefit is YPB’s integrated solution’s ability to open a direct digital channel to any brand via YPBConnect, allowing the brand to cultivate an ongoing relationship directly back to the consumer’s smartphone.

A range of data of significant value to the brand is also recorded by Connect in this process (with the consumer’s consent).

Knowing and understanding and having a direct channel to the consumer is the penultimate objective of the marketing discipline. That fact hints at the commercial potential of this solution.

Houston said, “Given our long experience in selling anti-counterfeit solutions, we now know that consumer engagement is the real hot button for brands and that they understand the power of authenticity to drive willing engagement. Our smartphone solution empowers brands and consumers to engage over a new, low-cost digital channel driven by our capacity to assure product authenticity.

"Given the high value we now know brands place on direct consumer engagement, we expect early success in brand uptake of our new solution in H2 2019 with momentum gathering through 2020. We have been working toward this position for years now and are finally at the point where strong revenue growth will follow the uptake momentum we expect to develop over 2020 and to well exceed anything achieved to date.”

It has been a busy week for YPB, with today’s announcement following shortly after it signed a new three-year Master Services Agreement (MSA) with leading Indonesian pharmaceutical and wellness company PT Combiphar.

The new MSA delivers the ASX listed technology company revenues of circa $1 million over the life of the contract.