BRS Labs Financials and Future Examined 2013

By Ben Wood, Published Jun 26, 2013, 12:00am EDT (Info+)

BRS Labs is one of the most ambitious companies in the surveillance market. While the company has aggressively touted its achievements, IPVM's review of BRS Labs financial documents demonstrates that actual performance lags that significantly. However, BRS Labs is also now touting major new growth opportunities. In this note, we examine BRS Labs financials and future.

[NOTE: BRS Labs sent a letter to IPVM, declining to comment on specific financial details from the document save for emphasizing that, "the majority of which has not been reviewed by its auditors and is not to be relied upon." (emphasis added)]

Claims vs. Numbers

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** ** **** ********* **** ********** *********, *** **** *** **** ** ******** ** ***** $** ******* ** contracts ******* ********* ****, ****** ******** **** * ***** chain ** *****, *** ***** *******, "a Southern *.*. ****" *** * ******* power *****.

*******, *** *** **** ********* ******** reports ******* **** ***** ** $***,*** vs. $**.* ******* ** ********* ********.

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** *** *** ** ****, ***** accumulated ******, ***** *********, ** $**+ million **** ********.

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2013 ******** ***** ** *******

*** **** **** *** **** ****** strategy ** “********* ******* ** ********* and ***************** ** ******* *.* [*** surveillance ********* *******].” ****’* ******* ***** 2012, ********* ** *** ****, ** its ***** ********, ***** ***** **** direct ***** ** ********* ******* *********. In *** ********* ******** ** ****, the ******* **** ** ********** ******* a *** ***** *** *** ******* and ********** **** *** ************** *** support, *** *** ******** *** “** longer *********** ** ** *** ******** increasingly ********* *** *********” *** *** number ** ************* *********. *** ******* says ***** ******* ** **** ****** its ******* ******* ********* ** *****-****, fixed ***** **********. ** *** ******** is *** **********, *** **** **** it ***** ** ***** *** ***** to *** ******* *********.

Expansion ** *****, *****, ********** *** *** ********

***** *** ********* ***** ********* ****** AISight ******* ** ************.

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High *&* *****, *** *&* ************The company’s goal to expand its technology seem especially ambitious considering its relatively low expenditures on research and development (~$2 million annually).

                *&*         ******* *** **************     Sales *** *********

****      $*.* *******             $*.* million                    $*.* *******

****      $*.* *******             $*.* million                    $*.* ******* 

**** * ******* ***** ** ******* it ***** ** ***** ~$** ******* more ** “**** ******* ******* ***** through ***** **, ****.”  ** *****, we ******** ** *** ****' ******* that *** ********* $** ******* **** *********, *** *******’* ******* ***** ** funding *** (**** ***** * ***** of ****** $** ******* ***** ****).

BRS **** *********?

*** ******* ********** *** **** *** is ****:

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  • ** ***, ********* ** *** **, is ********* * ******* ******** *** video *****, ********** ********* ******, ****** them * ****** ****** ******** ** the ******.

*******, *** ********* ******, *** *** weaker ******* ******** ** ****** *************, especially ******* ******** *** ************, ****** questions ***** ****** **********. *** ********* to ***** / ****** **** *********** new ******* **** *****, ********** *** the ******** ********** ***** ** *** own. **** ****, *** ******* *** built **** *********** *** ******* * marketing ******* **** ******* ** ********* who *** ****** ***** ******** ** millions ** *** ********. 

*** *** *** **** *** ** execute ***, ** *****, * *** more ***** ** ***** *** ******** success.

Comments (10)

One question regarding their financing/funding scheme:

Were original investors required to pony up additional funds in this last ($25M) round in order to retain their standing as investors in the company? i.e. would they lose any claims to their original investments if they didn't choose to invest in the new round?

Also, for some really good background reading on BRS Labs, check out this IPVM post from Sep '09 regarding two 'risky' companies (notice the other company mentioned besides BRS Labs was TimeSight - now defunct).

Riskiest Companies 2009 - BRS Labs and TimeSight

Check out the paragraph below from the comments.... and notice that even now, almost 4 years later, the bolded sentence below still applies... :)

- BRS Labs is drawing attention and winning awards for abnormal behavior detection. There's no independent published proof of how well this works (false negatives/false positives, environmental issues, etc.). Abnormal behavior detection without rules is a very hard technology to implement for production level security systems (especially if the costs to install and setup are to be kept at levels that users can pay - not $3,000-5,000 USD per camera, etc).

==========================================================

Compare the comments from 4 years ago to current day developments.... I don't see much change except for the amount of money raised.

I am pretty sure the original investors still have their stake. While newer investors dilute existing ones, presumably, the 'original' investors invested at a lower valuation and overall have increased their investment's valuation (at least on paper).

What we have heard from various people is that it has taken longer for BRS Labs to succeed than what they had earlier projected. This was acknowledged in a 2012 investor letter we read.

There is a fundamental problem with this type of learning based analytic, which is how does it acquire its training knowledge? There is no point in just feeding in a lot of video data because the analytic software needs to know if it is being fed a ‘true’ or a ‘false’ example of the situation it is looking for. In my experience, given a few weeks on-site, the PhD guys that develop this type of software can get it working quite well on a suitably chosen scenario. But that doesn’t mean it is an appropriate product for the mass market – the average customer just doesn’t have the expertise or patience to correctly configure this type of analytic.

Do these numbers include the high cost of gas used for ambulance chasing, or for the hallucinogens used by their marketing department?

How much money was invested into Avigilon & Exacq? Would be quite interesting to compare.

Exacq hardly had much investment at all. Almost certainly under $10 million, if not less. Avigilon was a little bit more (before they went public).

Probably the better comparables are 3VR, Object Video, VideoIQ, etc.. The average for those 3 is ~$50 million. Video analytics companies definitely need more money though, of course, their return has been lower than the VMS companies.

Doesn't pass the smell test to me, but then who can forsee the future. Thus my "undisclosed" comment.

:)

Undisclosed Integrator #2

This graphic is from the brslabs.com website: I do not own it.

Everyone so far, except John, is 'undisclosed'.... wonder why that is? :) (no I don't)

One thing that has always bugged me about the concept of 'behavioral analytics' is how it seems (to me at least) that they should be inherently easier to beat/game than rules-based analytics - if one has bad intentions.

Example:

In 'rules-based' analytics (like tripwire, wrong-way, heat sensors, etc) the only way to defeat them is to 'subvert' the analytic somehow - which is very difficult to do seeing as how humans are not invisible - and dead people, who give off no heat signature, can't walk around doing bad things.

However, with 'behavioral analytics', all you should have to do is 'not be considered abnormal'.

Since AISight purports to 'learn' what is normal over a two week period once installed on a camera system, why can't the bad guys 'learn' what is normal as well? They should be able to 'learn' by doing exactly what AISight is purportedly doing - simply watching.

If the bad guys want to plant a bomb at a Post Office (for instance), they can watch the comings and goings for a period of time and can determine what actions are 'normal' in this area. As long as they can mimic normalcy while completing their nefarious mission, then how can behavior analytics be relied upon to detect their activities? Before the bomb blows up anyway. :(

I notice BRS have more locations on their 'world map' than actual published addresses, with at least the London address giving what appears to be a mail forwarding service address (probably to this one).

I do wonder if previous UK presence, Introtech's 'plan to attack the market aggressively' fell short of BRS expectations (or vice versa?).

Regarding BRS Labs non-US/UK performance, we do not know enough about the specifics to comment.

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