This tiny ASX tech share is leaping 25% after striking a deal with Telstra

This tech stock is catching the eye on Friday. Here's why.

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Ava Risk Group Ltd (ASX: AVA) shares are on course to end the week on a high.

In morning trade, the ASX tech share was up 25% to 20 cents before being paused from trade.

Why is this ASX tech share rocketing?

The catalyst for this strong gain was news that the risk management technologies company has signed a major agreement with Telstra Group Ltd (ASX: TLS).

According to the release, AVA Risk has signed a Telstra Supply Agreement (TSA) that it believes establishes a substantial opportunity within the large and globally addressable telecommunications vertical.

Management notes that TSA is the culmination of 10 months of collaboration, including product trials with Telstra and its customers.

Those trials demonstrated the superior ability of its sensing technology to be deployed to Telstra's existing fibre network to detect events and provide appropriate classification and reporting. It notes that this provides a rich source of data to Telstra, and effectively turns the existing fibre network into sensors.

The ASX tech share believes it is a clear demonstration of the adaptability of the company's technology to adjacent applications, such as telecommunications, which opens significant new markets to the company.

Management has described it as a "significant milestone" for the company. Ava Risk CEO, Mal Maginnis, commented:

Signing a preferred supplier agreement with Telstra is a very significant milestone for Ava Risk Group. It underscores the strength of our market-leading solutions and is testament to our commitment to innovation to meet the evolving needs of our global client base. It clearly demonstrates that our sensing technology, which has evolved from security solutions, can be deployed to multiple applications. This collaboration cements our position as a trusted supplier, and we look forward to working extensively with Telstra.

With more than 5 billion kilometres of fibre optic cable deployed globally (as at 2022), the agreement with Telstra Group represents the entry into a large and attractive market vertical for Ava Risk Group's technology.

Earlier this week, Maginnis vested 333,333 AVA Risk shares.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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