Tuesday, December 16, 2014

Scytl’s 2014: Annus horribilis, or may be not

2014 was a peculiar year for the noisiest, albeit not the only Spanish company specialized in voting technology and solutions. Despite some major setbacks resulting from ill-developed voting solutions, it managed to close a $104 million financing round this year.

Image: Pixabay
The year had a bumpy start for Scytl. For Ecuador’s 2014 Sectional elections in February, Scytl was to deliver a solution that would help the Ecuadorian Election Commission to process the tallying of the votes with the goal that results could be announced within 72 hours after closing the polls. Yet, one whole month after the election was over, Scytl was still counting votes and was still unable to provide final results. In the mean time, Ecuadorian authorities were confronting the herculean task of convincing public opinion that the results would “soon be announced”- were legit. As a result of the scandal and ensuing public unrest, Domingo Paredes, head of the electoral management body, declared that the Election Commission had unilaterally terminated the contract, demanded payment of guarantees, and began taking legal actions against the company. Oddly enough, after the fanfare published in Scytl's website news in February and March about projects "in the works" as if the February election had been "a successful implementation", there has been a complete silence on Ecuador the following months.

A few months later (June) Norway —one of the countries leading the crusade to make internet voting a reality, and a client of the Barcelona-based company—, halted i-voting experiments amid security fears. As evidenced in the video posted by the Norway electoral authorities (2:31:13), the secrecy of 54% of the vote was in fact compromised during the September 2013 pilot due to a bug in the encryption key. These cryptography issues were also reported in the Expert Study Mission Report from the Carter Center.

Even though bad news are the ones usually travelling faster, neighboring Peru seems not to have found out about Ecuador’s ordeal with Scytl. And only five months after the infamous incident aforementioned, the National Office for Electoral Processes (ONPE) of Peru experienced first-hand the mishaps of a poorly designed in-site Internet voting solution. In August, while conducting an Internet voting pilot using Scytl technology, voters ran into all sorts of trouble to cast a ballot. In spite of the simplicity of the contest –only 186 polling centers serving 34,672 voters– the company was once more unable to deliver up to the expectations.  

To cap off the year, on October 27, Scytl ran into trouble once again— this time staged by its branch in Canada, while providing its internet voting platform for elections in 20 Ontario municipalities.

According to the company, five election files had been mislabeled due to human error, creating tabulations problems that delayed results. On November 6, the 20 municipalities got together to discuss the issues and demand explanations. Scytl apologised and offered a discount of 25% from the charges for their services, plus a 10% discount on a future project, as if Ontario's woes were of financial nature. Read more here.

In spite of all these incidents, Scytl managed to raise over 100 million dollars from capital investors. Among them: Vy Capital, Vulcan Capitan and Sapphire Ventures, formerly SAP Ventures – the independent venture capital firm associated to Europe’s largest software company.

Scytl’s PR department deserves a standing ovation for not allowing such a poor track of performances ruin a financing round; especially in the age of global communications and instant scandals when such blunders happen.