This Intrusion Startup Raised $57 Million

By: Brian Rhodes, Published on Jun 04, 2014

One of the top VCs in the world has invested a staggering $57 million in a DIY Intrusion monitoring company, Simplisafe.

But who is Simplisafe? Why did they get $57 million? And how do they compare to traditional offerings like ADT?

In this note, we examine the key drivers and structural differences. This is the first part of our Simplisafe review, which will conclude with a full test of the system later this month.

*** ** *** *** VCs ** *** ***** has******** * ********** $** million** * *** ********* ********** company,**********.

*** *** ** **********? Why *** **** *** $57 *******? *** *** do **** ******* ** traditional ********* **** ***?

** **** ****, ** examine *** *** ******* and ********** ***********. **** is *** ***** **** of *** ********** ******, which **** ******** **** a **** **** ** the ****** ***** **** month.

[***************]

Major ************

***** *** ******'* ********** is ******* ** ******, *** platform ********** *** *** distinctions:

  • ***: ********** ** ******** at *** '**-**-**********', **** purchase ** *******, *** monitoring. *** ****** *********** are ********, ******* *******, and ******** ******* **** stickers **** *****, *****, and *******.
  • ********** ********: **** ** ***** to ********, ******* ***** from ** ********** ******* cost ***** (****** *****) alarming ****, ** ** paying * ******* ******* station ******* (**** **** dispatch ******/****) ******* ******* $15 - $** *** month. ******* ********* **** features **** ********** *** access *** ****** ***/**** message ************* *** *******.

**** ** ***** ** hardware *** ****** ******, ********** is *** ******. *** central '*****' ******** ************ *******, *******, *** contact ********* ******* *** PIR-type ****** ********** ****** ** ********* ********* *********.

Product ********

********** *********** ******* ** *** same ***** ********, **** **** expensive ******** ********** *****, more ***** *******, *** the ********* ******* ********* more ******* *** ****** buildings *** ***** *** specialty ****. **** * look ** *** ***** video ***** *** * general ******** *** ************ plan ** * ******:

*** *******:

***** ****** ******** *** same '**** ***', * cone ******'**** *******' ******** ************ ******** * *** radio, ** ** ** sounder, * ~** **** backup *******, *** * status *****. *** ******* are ********** ********** ** this ******* **** ****** about *** - *** feet *****.

** **** ******* *** ** ********* ** one **** *** ****, a *** ** ***** basic, **** ****** ***** including ***** *******, ***** sensors, *****/** *********, *** expansion ******* *** ******** sirens. ******* ***** ******* powered, *** ******* ****** that **** ******* **** last ** *** ***** ** ******** sized ******* ************.

No ************ ******

***** **** *** ****** sales *** *** ************ model, *** ***** ***** platform ********** ** ******** central ******* ********** *** contracted **** **** ******. The **** ***** ******* are:

 

*** $** ******* '********' package ** ******* ** a ***** *********** ********** offering. *** $* **** a *****, ********** **** SMS/email ******, ***** ** not ******* *** *********** systems *** * ***** feature. **********'* ******* *** package, ***********, ** $** per *****, ****** *** remote *******, ***** ** essentially * ***-*** / basic ********** ********.

UL ******* *******

** *** ********** ******, a '** ******' ******* station ** *** ******** rating *** ************ ***** service *********. *** * central ******* ** ******* 'UL *****' ******, ** must **** ************ ** hardware ******, **********, *** employee ********** [**** ** longer *********].  **********'* ******* station ** * '** rated' ** '** ******' station, ******* ** ***** the *********** ********* ** many ********** ********. ** is *** * ************** compared ** *********** *********.

Claimed **********

********** ****** ** ****** a ****** ** ******** common ** *********** ***** companies, *********:

  • ******** ** *****:*** ****** ********** ******** is ******** *** ******* powered, ***** ** ****** shaves ******** *** * traditional ***** ******. ***** installation ** ******* ** sticking ******* ** ***** using ****, *** ********* cost *** *** ** less *********, *** *** cost ** ******** ********* in *** ******* *** be ~$**+ **** *** a ****** ****** ** 15 - ** *******. A ********* ****** **** not ******* ******* ****. Additionally, ******** ******* *** not ******** **** ** incumbent *******, *** *********** and *********** *****, ****** an ****** *** *** alarm ******.
  • ******* **********: ** **** *****, SimpliSafe ****** *** ~$**-$** /month ********** ** **** expensive **** ********** ******* ~$30 -$** *** *****. Indeed, *** ***** *******, SimpliSafe *** ** ******* and ***** *** **** 'UL ******' ******* ******* as **********, *** *********** customers *** **** **** ********* alternatives **** *********** ********** providers.
  • ** ******* *********:**** ***** ** ** advantage *** **********. ****** incumbent ***** ********* **** routinely **** ********* *** a ********** ****, ***** 36 ****** ** ******, SimpliSafe **** *** ******* ****** anything ***** ******* ********. If ********** ******* ** declined, *** ****** ** still *********** *******, *** any ******* *** ** cancelled ** * *****-**-***** basis.
  • ** **** ******:********** **** ****** ** needs ** ***** ********, nor **** **** ** if *********. ***** * built-in *** ***** ** communicate **** ******* ******** allows ****, *** ***** this ** *** ********* to **********. ******, **** incumbents **** ******* ******* GSM ***** ******* *** years *** **** ****** phone ******** ************.

No ***** ** **********

*******, ********** ***** ****** end ********. *** *******, 'power ********' **** **** or ******** ******** *** video ************ **** *** available ** ******** ********* ********* **** ********* ********** ******** *** ******* ** SimpliSafe.

***** ********* *** ****** attracted ** *** ***** costs ** **********, *** equipment *** ******** *** basic ******** ** **** featured ********* ******* ********* **********.

Price ***********

*** ***** ******* ** only *** **-***** ******* alerts, ********** ***** * lot ** ***** ** it ** **** *** one **** ******* **** ($250 ** $***) ****** ~$1,000 **** * * year ****** *** * traditional ***** ******.

*******, *** ***** *** want ********* ********* ******, the ***** ********** ** much ******. **** **********, you *** *** ******* cost *** **** *** $15 ******* ***. **** a * **** ******, that ** $*** ** $1,000, ***** ** **** a *********** ****** ***** (given **** *** ******* cost ** ********* ******* / ********* **** *** monthly ***).

**** **** ***** (* years, *, ****), *** costs ******* ** ********** increase ** *********** ***** providers ******** ** ****** the **** *** **** after *** ********* *** been '**** ***'. 

The $** ******* ** *******

******** ** *********** ***** systems, ********** ** *** revolutionary *** ** **** offer **** ******* *** some *************. ******, ********** is **** *** ** many *** ********* *********.

***** ********** *** ******* in **** *** ******* 100,000 *********, ***** ***, the ******* ******* ** have ***** **** **** modest ******** *******.

*** $** ******* ** funding **** *** **** embark ** * ******* style ******* ********* ********. And **** ** *** key ********* / ************** here.

**** ** ********** **** not '****' ***, ***** clearly ** ** *********** for * *** ***** alternative ** ****** * major ******. *** **** $57 ******* ** ***** over *** **** *** years *** * ********** VC ****** ****, **** have * **** ** it.

 

Comments (6)

Gòod one. It will be up to their marketing now to recover investment and start making an actual profit.

There are quite a few companies out there with product-range based on this concept. We have come across 'Alpha Arsenal', a Russian brand and have checked their products. The only thing I can say about DIY feasibility is - they are not very simple to set up thru' smartphones.

Hope Simplisafe products are simpler to work with and offer excellent value for money.

Speaking of profits, Simplisafe said they became profitable in 2011.

Now, with such massive VC funding, profitability is not only irrelevant, it is the adverse of their aim. It's all about hockey stick growth, market excitement and sale to Google/Apple/Facebook/Amazon/whatever...

There are quite a few competitors in the DIY security market. Major difference I see is that SimpliSafe has been running ads on the radio vs relying solely on Youtube, a few google keywords and word of mouth.

Scott, I agree that there are a number of competitors. Do any of them have the warchest Simplisafe just got?

No, and maybe with well placed advertising they can capture that part of the market -

Simpli Safe is one of the few DIY security groups that seems to have their own equipment (not using a packaged Honeywell or GE Wireless) does anyone know who they OEM thier equipment from or if they actually manufactured and engineered thier own products?

They dont appear to have a camera setup to their system, which I am sure they plan to change - lots of cities are ignoring standard alarm calls if no verification is implemented.

Hello Scott:

SimpliSafe uses their own sensors, which are designed and manufactured for them.

The sensors they offer are pretty basic, so I wouldn't be surprised if they just buy 'reference designs' and tweak them for use with their base station.

Re: Cameras - supposedly video integration has been roadmapped since 2011, and the company suggests it will be released soon. No word if the central station will have access to this video (for video verification) or if it will be only for local/end user to view.

If you want to get the SimpliSafe fanbois worked up (yes, they are out there), just ask them when video is coming... it is highly anticipated among that crowd for sure.

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