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

Netwatch / NMC Mega Deal Targets Global Remote Video Monitoring on Apr 27, 2018
Big money has entered the remote video monitoring market. While remote video monitoring has been done for more than a decade, the market has...
Rare Video Surveillance Fundraising - Verkada $15 Million on Apr 19, 2018
Fundraising in video surveillance (and the broader physical security market) has been poor recently. Highlights are few and far in between...
Owl Car Cam Tested - Disappoints on Mar 30, 2018
With $18 million in VC funding, and led by the former product lead for the iPod and the VP of Engineering of Dropcam, Andrew Hodge, hopes are high...
Wireless Networking For Video Surveillance Guide on Mar 29, 2018
Wireless networking is a niche in video surveillance applications, but it can be a difficult one to understand with proper wireless design,...
Dahua Global Launch LeChange on Mar 20, 2018
Dahua is getting into the consumer video surveillance market globally, with "LeChange", an offering long available inside of China is now being...
Cellular (4G / LTE / 5G) For Video Surveillance Guide on Mar 06, 2018
In this report, we explain using cellular for video surveillance including: 4G vs LTE vs 5G 4G standards 5G future Advantage: Placing cameras...
Directory of 50+ LPR / ANPR Providers on Feb 21, 2018
License Plate Recognition / Automatic Number Plate Recognition are a type of video analytics software that can identify and match license / number...
Remote Network Access for Video Surveillance Guide on Feb 21, 2018
Remotely accessing surveillance systems is key in 2018, with more and more users relying on mobile apps as their main way of operating the system....
Arlo, Bigger Than Avigilon, More Valuable Than Axis on Feb 08, 2018
Arlo, the wireless IP camera offering that Netgear bought ~5 years ago for a few tens of millions is now doing more revenue than Avigilon and...
3VR Firesale to Identiv on Feb 07, 2018
A decade ago, 3VR raised more than $60 million to deliver facial surveillance and video analytics in a '3rd generation' video recorder. Now, 3VR...

Most Recent Industry Reports

Dahua Intrusion Analytics And VMD Tested on May 21, 2018
Dahua ships basic analytics on practically all their cameras, ranging from low cost to high end. To see how these analytics work in real world...
Exacq Improving Technical Support, Responding To Integrator Complaints on May 21, 2018
Exacq had been a long-term favorite of integrators, but since their 2014 Tyco acquisition, Exacq has fallen in IPVM integrator studies (though...
Best Manufacturer Technical Support 2018 on May 21, 2018
While 5 manufacturers made the worst technical support 2018 list, only 3 stood out as providing the best technical support to 190+ integrators in...
Stealth / UCIT - Remote Video Monitoring Provider Profile on May 18, 2018
Can 2 remote video monitoring companies, Stealth Monitoring from the US and UCIT from Canada combine to impact the market and compete in a changing...
Cybersecurity for IP Video Surveillance Guide on May 18, 2018
Keeping surveillance networks secure can be a daunting task, but there are several methods that can greatly reduce risk, especially when used in...
Forced Entry / Duress Access Tutorial on May 17, 2018
Even though access control normally keeps people safe, tragedies have revealed a significant issue. If users are forced to unlock doors for...
ADT Stock Drops 50% Since IPO on May 17, 2018
It has been a brutal 4 months for ADT. They first expected to IPO at ~$18. They IPOed at $14, dropping immediately to $12.39 And now, not even...
Dahua 12MP Fisheye Camera Tested (NK8BR4) on May 16, 2018
Continuing our coverage of 12MP sensor fisheye cameras, we bought and tested the Dahua NK8BR4, examining: Default vs. Optimized...
Worst Manufacturer Technical Support 2018 on May 16, 2018
5 manufacturers stood out as providing the worst technical support to 190+ integrators in new IPVM results. These integrators answered: In the...
Installing Cameras in Plenums Tutorial on May 15, 2018
There is often confusion about plenum ceilings, with misinformation about what is required when running cables through them and mounting cameras...

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