What could possibly go wrong if "Mobotix" is involved?
Mobotix Owner Ups Investment In Knightscope
Published Jun 06, 2017 04:00 AM
Knightscope is asking for investments from literally anyone, with a public "mini-IPO". Recently the company secured some additional funding from Mobotix owner Konica Minolta, who initially invested in Knightscope's $3.8M Series A round in 2014.
In this update, we analyze Konica Minolta's additional investment, and the additional support that Konica Minolta is giving Knightscope to help their competitive position.
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Comments (9)
JE
Jeremy Ellis
Jun 06, 2017JB
Josh Bylsma
Jun 07, 2017Has Knightscope provided any information on what they expect the market size to be, in terms of annual revenue and CARG?
I do not plan to invest, but am simply curious how they are justifying the investment requests to investors and the proposed ROI. Unless their plan is to simply build and dump... i.e. greater looser approach.
I have to admit, that in idea alone, the roaming guard robot is interesting, however I struggle to see the true market potential. It feels more gimmicky than a viable security and business solution.
JH
John Honovich
Jun 07, 2017Has Knightscope provided any information on what they expect the market size to be, in terms of annual revenue and CARG?
From Knightscope's SeedInvest page:
Globally the 200+ countries around the world spend over $500 billion per annum on security in the public and private sector with approximately $300 billion addressable by Knightscope's plans and aspirations. We believe it to be possible to build a $30 billion company focused on advanced physical security technologies with a portfolio of products around the world. As the global population grows from 7 billion to 9 billion people, we believe the worldwide security and law enforcement apparatus will not scale and will require new solutions.
In the U.S. there are 8,000+ private security firms and 17,985 law enforcement agencies - a fragmented marketplace which we believe offers numerous opportunities for disruption. There are 3 major private security firms in the U.S. and Knightscope is partnered with 2 of them: Allied Universal and Securitas. Knightscope can help our channel partners in the private security industry with margin expansion, competitive advantage in the marketplace and long-term employee and client retention by providing a 'sticky' technology set. Globally, G4S employs 600,000 people, Securitas 300,000 people and the new Allied Universal will employ a combined 140,000 people.
Not clear if they mean a $30 billion market capitalization or revenue but, either way, with a current market valuation of ~$100 million, that would be a great return.
How they get to $30 billion is, of course, the hard part.
Brian Karas
Jun 07, 2017They have the following slide in their pitch deck:
Somewhat surprising (to me) is that the machines are only rated for a 5 year service life, and the COGS is roughly equal to first year revenue (~$60K).
Then there are still costs for sales and marketing, staffing their "KSOC", and most likely some amount of maintenance/repair costs over that 5 year lifespan.
JB
Josh Bylsma
Jun 07, 2017Very interesting. Thanks for sharing.
I also find their growth strategy to be a bit aggressive. Assuming that their market assumptions are correct, and that there is a $300 Billion market for security robots, one could make the argument that the growth numbers for an early entrant would be substantial. However, I do find these a bit aggressive.
YR1 100>597 - 497% YoY
YR2 597>1,569 - 167% YoY
YR3 1569>3950 - 151% YoY
YR4 3950>7978 - 102% YoY
The support, sales and technical resources to support ~8000 robots in the field around the world will be very costly as well. Without true market data, it is near impossible to calculate the on-going operational costs of each unit.
Vincent Tong
Jul 17, 2017
JH
John Honovich
Jul 17, 2017Vincent, thanks for sharing! It looks like that might have just happened because the image was posted just over a half hour ago from DC. @Karas ask Knightscope for comment please.
U
Undisclosed #1
Jul 18, 2017They are really putting the old adage "Any news is good news" to the test...
UI
Undisclosed Integrator #2
Jul 18, 2017I can hear it speaking now "Do not toss foreign objects into fountain. I must retrieve evidence"!!
Well, there's my 2 cents worth on how to defeat a K5 Robot.
For those old enough to remember "Danger Will Robinson, Danger"