Australian cybersecurity developer ArchTIS has successfully completed a $A7.5 million capital raising to accelerate its expansion into the lucrative US defence market and strengthen strategic partnerships.

The placement, which was strongly supported by both new and existing institutional investors, involves issuing 50 million new shares at A$0.15 per share - representing a 17.4% discount to the seven-day volume-weighted average price.

The capital raising comes at a pivotal moment for the company, which recently achieved a major milestone by securing its first contract with the US Department of Defense. A prime government contractor has awarded ArchTIS an initial contract for 1,000 users of its NC Protect platform, with expectations for significant expansion across the broader US DoD potentially reaching 150,000 users.

"This capital raise marks a pivotal step forward in executing our strategic international expansion and revenue growth plans," said Daniel Lai, ArchTIS Managing Director and CEO.

"The funds raised will enable us to scale our US operations, strengthen our existing strategic partnerships, and accelerate product development and innovation to meet the evolving, stringent security needs of enterprise and government clients."

ArchTIS operates in the data-centric security market, which represents an $A11 billion subset of the broader $A225 billion cybersecurity market. The company has identified a $2A billion available market opportunity, with ambitions to capture $A200 million of this market - a 20-fold increase from current levels.

The company's technology leverages Attribute-Based Access Control (ABAC) to enforce dynamic security policies, ensuring data is accessed and shared only by authorized users under specific conditions. This approach has proven particularly valuable for defence and intelligence agencies requiring secure collaboration on classified information.

ArchTIS has outlined a three-stage international expansion strategy, beginning with AUKUS and CMMC compliance in the US market, followed by cross-selling to Americas clients, and ultimately expanding AUKUS offerings into the UK market.

The company currently has five major proof-of-concept projects underway, including engagements with global defence industrial base companies, military alliances, and technology firms seeking data sovereignty solutions.