Biggest VSaaS Funding Yet: Dropcam's New Round Examined

Author: John Honovich, Published on Oct 09, 2011

While dozens of companies are launching VSaaS services, to date, all of these new companies have relatively small amounts of funding - typically less than a million dollars. Now, Dropcam has announced a new Series A funding round of nearly $6 Million, much higher than any other VSaaS startup. In this note, we examine Dropcam's potential, how it matches up against Axis AVHS partners and other potential rivals.

Dropcam Overview

Dropcam has a fairly straightforward offering - Choose from 1 of 2 OEMed Axis cube cameras and from one of 3 service plans (either free for live viewing or up to $24.95 for a month of recording). You can buy directly online from them. Dropcam's offering has changed little since our first review last year.

Dropcam Size

We estimate that Dropcam has between 2,000 and 5,000 total customers. While Dropcam would not comment on this point, we base this on the following:

  • Dropcam confirms that they have ~15 employees.
  • About 60 Amazon reviews currently are posted for their cameras.
  • About 250 iTunes App store ratings (though many are for just viewing public cameras, not actual paying customers)

To the contrary, readers should note that the moderator of the VSaaS LinkedIn discussion group is claiming that Dropcam has 150,000 customers. However, given the metrics cited above, we think this is impossible.

Dropcam Future

We asked Dropcam a number of questions about what they are going to do next. Here are the most interesting responses:

  • "We've gotten so much interest from other manufacturers that we realize there is a real need for a secure, reliable, scalable cloud-based recording and analytics service which we plan to provide and improve as time goes on."
  • "Dropcam's vision is big - we want to connect everybody with the things they care about. Our focus is the residential consumer, and we want to make sure we give them a seamless experience.  Easy.  Simple. Anywhere.  That is Dropcam's mantra, and that's why we think this is primarily for the mainstream consumer."

The biggest competitive advantage Dropcam now has is far more funding than any of their competitors. While many are re-selling Axis AVHS, Dropcam can invest and develop a more sophisticated overall solution.

Competitive Analysis

Given Dropcam is clear focusing on the consumer market, we will constrain our analysis on just that segment. Here's how we break down Dropcam versus the 3 main competitive options:

  • The strongest competitor is not a single company but the general trend of offering simple, no recurring cost consumer remote viewing options. The best example of this may be iCam, a service we tested last year. It's just $4.99 one time cost for a powerful Dropcam alternative that works with a variety of cameras. It's quite popular as well with over 3600 ratings on the App Store. Dropcam will have difficulty defending against this as it is significantly less expensive while meeting a similar need.
  • A number of alarm companies are now bundling IP cameras with their offerings at relatively inexpensive prices while using their existing techs/support infrastructure. We expect that online services like Dropcam can co-exist with alarm companies offerings as alarm companies only have so much market reach.
  • We expect that Dropcam will be more attractive to consumers that AVHS partners who are not innovating much on the software side and are likely more attracted to bigger projects from their core business customers. AVHS partners, of course, have their own problems.

Outlook

Until now, Dropcam's offering has had little differentiation to other options (AVHS, alarm companies, etc.). Now with a significant cash infusion, it will be interesting to see what improvements it can make. Silicon Valley money is no guarantee of success (see 3VR, Intransa, Pivot3) but it does provide a major short term advantage for building up a new product. It is worth watching Dropcam closely over the next 2 years to see how significantly it can evolve.

Comments : PRO Members only. Login. or Join.

Related Reports

Haven Targets School Security with Lockdown Lineup on Nov 08, 2018
Haven, a US startup founded in 2014 as a residential-focused company, has now raised funding and is offering a lineup of commercial grade locks for...
Cloud Video Storage Usage 2018 on Oct 31, 2018
Storing email and documents in the cloud have long been common, with on-site email or file servers increasingly eliminated. However, what about...
Wyze Explosive Growth Disrupting Consumer IP Camera Market on Oct 30, 2018
Wyze, a company founded only in 2017, is poised to disrupt the consumer IP camera market by combining American marketing and Chinese manufacturing...
Directory of Access Control and Intrusion Startups on Oct 30, 2018
This directory catalogs access control and intrusion detection startups IPVM has found noteworthy. The directory is provided for your review to...
ADI's Financials Revealed + W-Box Growth Priority on Oct 15, 2018
  ADI is one of the most powerful distributors in the security industry but how big are they? How much profit do they make? How much do they sell...
Amazon Ring Spotlight Cam Tested on Sep 17, 2018
Amazon's Ring has released their latest camera entry, the Spotlight Cam, which we bought and tested in our Consumer IP Camera Analytics...
VMS Export Shootout - Avigilon, Dahua, Exacq, Genetec, Hikvision, Milestone on Sep 13, 2018
When crimes, accidents or problems occur, exporting video from one's video surveillance system is critical to proving incidents. But who does it...
US DARPA Investing $2 Billion In AI on Sep 11, 2018
The US Defense Advanced Research Projects Agency (DARPA) is granting more than $2 Billion to companies developing new AI technologies. The money...
Ambarella on Computer Vision and US Hikua Ban on Sep 10, 2018
Ambarella, a widely-used video surveillance component supplier, is betting on the rise of computer vision and is already seeing a sales impact from...
Why Vivint / Best Buy Failed on Aug 31, 2018
DIY has bested Vivint. In 2017, Best Buy and Vivint partnered with Vivint employees on the floor of 400+ Best Buy stores, helping customers with...

Most Recent Industry Reports

Hikvision Silent on "Bad Architectural Practices" Cybersecurity Report on Nov 14, 2018
A 'significant vulnerability was found in Hikvision cameras' by VDOO, a startup cybersecurity specialist. Hikvision has fixed the specific...
French Government Threatens School with $1.7M Fine For “Excessive Video Surveillance” on Nov 14, 2018
The French government has notified a high-profile Paris coding academy that it risks a fine of up to 1.5 million euros (about $1.7m) if it...
Integrator Credit Card Alternative Divvy on Nov 13, 2018
Most security integrators are small businesses but large enough that they have various employees that need to be able to expense various charges as...
Directory of Video Intercoms on Nov 13, 2018
Video Intercoms, also known as Video Door-Phones or Video Entry Systems, have been growing in the past decade as more and more IP camera...
Beware Amazon Go Store Hype (Tested) on Nov 13, 2018
IPVM's trip to and testing of Amazon Go's San Francisco store shows a number of significant operational and economic issues that undermine the...
Magos Radar Company Profile on Nov 12, 2018
Magos America General Manager Yaron Zussman admits when he first came across Magos, he asked himself: "What's innovative about radar?" Be that as...
Genetec Privacy Protector Tested on Nov 12, 2018
Genetec has built Kiwi Security's Privacy Protector into Security Center, an analytic which anonymizes individuals in cameras' fields of view...
Chinese Government Increases Hikvision Ownership on Nov 12, 2018
The Chinese government - Hikvision's controlling shareholder - is increasing its ownership of the video surveillance giant amid sharp stock price...
Axis: "No One Wants To Buy A Camera" on Nov 09, 2018
Axis has, in its own description, made a bold declaration: The industry is changing so rapidly that the following statement might seem bold but...
Video Surveillance Hard Drive Size Statistics 2018 on Nov 08, 2018
What is the most common hard drive size for video surveillance? 150+ integrators answered: What size hard drive do you most commonly use? What...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact