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Serstech Strives to be Great in the Security Industry

Serstech, a company located in Ideon offices, has a product that can counteract drug trafficking, stop terrorists, and help emergency services detect dangerous liquids. With their lightweight spectrometer, they are able to quickly identify more than 14,000 substances.

A small plastic bag filled with white powder is on the table. Stefan Sandor, CEO of Serstech, demonstrates how to examine the contents of the bag without opening it by pointing the spectrometer instrument’s nozzle at the bag. The instrument works by supplying energy to the substance, which causes the molecules to vibrate and creates an electromagnetic wave. Based on where the peaks are and how high they become in the spectrum of the substance, the instrument is able to read what substance is in the bag. After about 10 seconds, the instrument displays that the bag contains pyruvic acid and the screen turns green, which means that the substance is allowed.

“All molecules of substances are unique and you could say that they have their own fingerprints,” states Sandor. “One advantage of the spectrometer is that is can read through transparent packaging like plastics bottles, glass bottles, and plastic bags. This is important because many substances are very dangerous, sometimes even deadly, to breathe. Another advantage is that no evidence is destroyed because the sample is neither affected nor consumed.”

Researchers at the Technical University of Denmark (DTU) in Copenhagen worked to develop an extremely small Raman spectrometer. This patent was purchased by Swedish businessmen and became the foundation of Serstech’s product.

The instrument weights only 650 grams, can be held in one hand, handles shocks well, and has a long battery life. This makes it suitable for work in the field. The instrument can help police and coast guards to find narcotics and explosives, customs to catch smugglers as well as validate freight documents, and rescue services to inspect potentially flammable places, leaks in the event of accidents, and dangerous containers in the event of a fire. Since September 2019, it is even possible for pharmaceutical manufacturers to use the instrument to validate raw materials for production. The instrument recognizes 14,000 substances in liquid and solid forms, though not metals.

“Our product feels important when you consider the problems that exist in society today with narcotics and terrorism,” says Sandor. “Smugglers are so skilled that only about six percent of narcotics in Europe are seized. The rest reaches the end customer and this creates extreme problems for individuals and society. It feels good to do something that really undermines smugglers, because the instrument can’t be fooled.”

The market for Serstech is international and almost all customers require confidentiality agreements. A few customers that Serstech is allowed to identify include the Swedish National Forensics Centre, the Swedish Defence Materiel Administration, and the Swedish Defence Research Agency. In terms of international presence, the World Customs Organization, the United Nations Office on Drugs and Crime, and the coast guards of several countries are also customers.

The instrument is purchased through public, but often secret procurement processes. This requires a special type of sales strategy.

“We have 85 local partners around the world who are already suppliers in the industry and therefore have access to purchasing and procurement processes. Without them, we would not have known about available procurement processes,” declares Sandor.

Through partner networks Serstech can easily reach out with new products and there are even discussions with major gas instrument manufacturers about collaboration in product development and distribution.

The instrument’s software includes a library of substances that is easily updated with new substances. For example, the drug Fentanyl is a complex laboratory-produced molecule that is constantly changed by its manufacturers to deceive detection systems. This is why using technology that adds new substances easily and updates quickly is so important.

Seventeen employees work at the office in Lund and Serstech is on the edge of an expansion. Manufacturing is outsourced to Skellefteå where production is built to order and there is an additional seven person development team in Romania. Stefan Sandor began at Serstech in 2018 with the mission to turn a small research company into a product company and to commercialize the produces. He has already come a long way.

“We invested commercially in 2018 and have had explosive growth since then. Compared with the same quarters of 2018, sales in 2019 increased by 170 percent in the first quarter, 227 percent in the second quarter, and 140 percent in the third quarter. We are now largely cash flow neutral and have gone from loss to nearly profitable during the year.”

At the end of 2019 Serstech issued new shares to raise SEK 25 million. The idea is to take a big step to increase both development and sales.

“We have the right conditions to take the next step, what with already having a very close to profitable business,” concludes Sandor. “By applying modern thinking on industry, we hope to gain a significantly greater market share with our instrument. With software as the core, we can then connect more instruments and create a system solution that has enormous potential.”

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