[Company Visit] "Fasoo Achieves Results in the Global Market After Over a Decade of Challenges"

It is extremely difficult for a domestic software company to succeed overseas. Even if a company has competitive software, it is still small in scale compared to global corporations and has difficulty building references. Despite these challenges, there is a company that has been taking on the overseas market for over a decade: Fasoo, a data security specialist. Fasoo established a subsidiary in the United States in 2012 and has persistently knocked on the doors of global companies. As a result, the company is now generating overseas sales, and the scale of these sales continues to grow.

Pasoo office corridor located on the 17th floor of Nurikum Square Business Center. Pasoo

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Although Fasoo recorded sluggish results in the first half of this year, the company emphasizes that this is merely a seasonal issue and does not indicate a fundamental problem with growth. Fasoo explains that its performance will continue to improve, with overseas sales expected to increase in the second half of the year.

Fasoo was founded in 2000. It was the first in the world to commercialize Digital Rights Management (DRM) technology. DRM is a security technology that allows only specific individuals to access digital content, such as documents, or limits access to a certain period of time.

I visited Fasoo's headquarters in Sangam-dong, Mapo-gu, Seoul, located in Nurikum Square. Fasoo occupies a total of three floors here. The sixth floor houses the research and development center, which is responsible for developing all of Fasoo's products and solutions, including data security, cloud, and artificial intelligence (AI). The seventeenth floor is home to staff organizations such as marketing and consulting, while the thirteenth floor is where the subsidiary Sparrow is located.

As is typical for software companies, there were no manufacturing facilities to be found. A company representative said, "It's always a bit awkward to show visitors around because, at first glance, it just looks like a regular office."

Blue Mountain, the main conference room of Pasku. Various awards and plaques of Pasku are densely displayed on one wall. Pasku

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However, if you visit the main conference room on the seventeenth floor, you can see evidence of Fasoo's technological prowess. One wall is densely lined with various awards and plaques. Fasoo invests more than 20% of its annual sales in research and development (R&D). The company is deeply committed to technological innovation.

While touring the office, I began an interview with Jisoo Lee, Head of the Management Support Division and Chief Financial Officer (CFO). Lee is one of the founding members of Fasoo, along with CEO Kyugon Cho.

Fasoo posted disappointing results in the first half of this year. On a consolidated basis, sales reached 19.1 billion won, a 1.6% decrease compared to the same period last year. The operating loss widened to 3.7 billion won. For investors, these results were disappointing, especially since Fasoo had announced its "Corporate Value Enhancement Plan," aiming for 20% annual sales growth, a 25% operating margin, and a 30% shareholder return rate by 2030.

Lee explained, "Last year, overseas contracts were concentrated in the first half, but this year, that was not the case. Given the seasonal tendency for sales to be weighted toward the second half, we expect performance to trend upward in the latter part of the year."

She added, "We are the only company that supports not only the Windows operating system but also Mac OS and CAD files. More and more overseas companies that have reviewed our products for a long time are ultimately choosing us."

She continued, "We expect two large-scale contracts to be signed in the second half of the year, along with increased product orders from our existing client, Company G."

Jisoo Lee, Head of Management Support Division and Chief Financial Officer (CFO) at Fasoo. Fasoo

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Fasoo expects overseas sales to increase even further in the future. Until recently, the overseas data security market remained at a basic level, such as data loss prevention (DLP), but as hacking and other issues have become more prominent, demand for advanced data security solutions like DRM is growing.

In addition, the increase in subscription-based sales is a positive factor. In 2021, subscription business sales accounted for only 23% of Fasoo's total revenue, but last year, this figure rose to 43%.

She emphasized, "With perpetual licenses, only maintenance revenue is generated after the initial sale. In contrast, subscription-based sales may generate less revenue in the first year compared to perpetual licenses, but over time, they provide more stable revenue."

Office view of the Pasku Development Center located on the 6th floor of Nurikum Square. Pasku

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Given Fasoo's strength in data security, the growth of the artificial intelligence (AI) market is expected to bring new opportunities. This is because the need for security in large language models (LLMs) is growing as AI advances. Fasoo already has several enterprise AI products.

She stressed, "AI can reflect document-specific access rights, preventing inappropriate information exposure in AI-generated responses. We already generated sales last year, and this year the scale will be even larger." She added, "Since we have obtained GS certification required for registration with the Public Procurement Service, we will further expand our presence in the public sector market in the future."

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