In the years after the Berlin Wall crumbled, San Diego’s Mitek Systems was one of many local defense contractors left high and dry by a receding tide of Pentagon spending. These days, however, the company is riding a wave of success with new technology that enables a person to use a smartphone camera to deposit checks and conduct other mobile transactions.
“We have created awareness in the payment industry as an innovator,” says Jim DeBello, a one-time Qualcomm executive who stepped in as Mitek’s CEO in 2003, and has served on the company’s board since 1994. “We really look at the online camera as a device bridging the physical world with the digital world.”
As I reported last year, Mitek says its technology saves consumers from a trip to the bank or automated teller machine by enabling them to use their smartphones as scanning devices. After initiating a mobile-banking session, a user snaps photos of the fronts and backs of the checks they want to deposit. Mitek’s cloud-based software then delivers enhanced images of the deposit in the format required for specific banks and financial institutions.
Today the company’s financial results remain small—Mitek posted sales of nearly $2.9 million for the fiscal second quarter that ended March 31—yet that represented an 89 percent gain over sales of $1.35 million in the same quarter last year. As the company announced new customers, which now includes PayPal, Chase, Bank of America, and Capital One, Mitek’s stock has soared by 1,150 percent—-from 56 cents a share on April 6, 2010, to $7 a share yesterday.
“Five out of the top 10 banks have signed agreements to use our flagship technology for mobile deposits,” says DeBello. The Mitek CEO says the company also has agreements with nearly all of the channel partners that serve banks and financial institutions in North America, including Fiserv, NCR, Diebold, and FIS.
More recently, a regulatory filing shows Mitek closed a $15 million private placement to boost its working capital as part of its plan to move its listing from the over-the-counter bulletin board to the Nasdaq Capital Market. The company had almost $3 million in available cash at the end of March, and the Nasdaq listing is expected to heighten Mitek’s visibility with investors. Mitek submitted its application to Nasdaq several weeks ago, and already meets the exchange’s financial and reporting requirements, DeBello says.
The company’s increasing momentum has been vindicating for John Thornton, who became Mitek’s board chairman in 1987 and has served as
