The new arms race is underwater and this Canadian marine technology company is in the spotlight

Greg Reid, president and CEO of Kraken Robotics, joins BNN Bloomberg to discuss the company's earnings and future plans.

As the war in Iran intensifies the need for underwater security, a Canadian marine technology company says it stands to greatly benefit.

Kraken Robotics says it is seeing a rapid increase in global demand for its subsea technology as nations intensify defence and security spending.

The Newfoundland based company produces technology that serves as eyes on the ocean floor, by providing high-resolution seabed mapping and imaging, which allows it to protect naval fleets and check on critical subsea infrastructure like cables and rigs.

“Around the world, there’s a number of hotspots, and as it relates to maritime security, our technologies are seeing quite considerable demand on that front,” says Greg Reid, president and CEO of Kraken Robotics.

The war in Ukraine and rising tensions have highlighted the vulnerability of undersea oil pipelines and communication cables. Countries beyond the major powers like Russia, China and the U.S. have been ramping up their underwater presence.

Reid says his company saw an increase in interest after the Nord Stream explosion in September 2022, where the Russian-German gas link was broken after three of the four natural gas pipelines were bombed.

Now the war in Iran brings similar concerns, he says.

“The Strait of Hormuz, you know, the real challenge there is underwater mines,” says Reid, adding that his company’s technology was developed when the company first started mine hunting applications.

“So we are one of probably three or four companies in the world that have this type of capability,” says Reid.

Expanding global maritime capabilities

Kraken Robotics announced a massive deal last month, expected to close this quarter.

The company is in the midst of acquiring Covelya Group Limited, a UK-based provider of underwater technology, for a total of $615 million.

“It’s really transformative for overall business,” says Reid, adding that the businesses complement each other,

“If you think about the underwater drone space, some of the largest customers in the world, we are providing key systems and subsystems into them, and the Covelya Group adds additional content in those underwater drones.”

Reid says the company already has some contracts with the Canadian government for the Canadian Navy and expects more business as a result of the increase in defence spending.

He says the 14 year old company has operated in all geographies whether it’s in the Mediterranean or the Middle East or the Canadian Arctic.

Soon to be on the Toronto Stock Exchange

Reid expects Kraken Robotics to be listed on the Toronto Stock Exchange in the second half of 2026.

The company is already listed on the TSX Venture Exchange.

“I characterize it as if it wasn’t for this Covelya acquisition, we would already be there,” says Reid.

“We believe we pass all the tests in terms of the financial metrics required to be on the TSX. So we’re really focused now on closing this, actually acquisition of Covelya here in Q2.”

He says despite a slight miss in the final quarter of last year, the company’s annual performance was strong, jumping from $10 million to over $100 million in revenue in just four years.

He said a few orders slipped into the first half of 2026, which affected the first quarter, but the company still expects a 60 per cent revenue growth in the coming year with high profit margins.

“The quarters can be lumpy at times, but overall, the business is seeing a lot of good demand, and this acquisition is something that we’re definitely excited about,” says Reid.