Examining Firetide's 5th Round of Funding

By John Honovich, Published Oct 07, 2009, 08:00pm EDT

With a fifth round of $8.5 Million USD, Firetide's total funding is over $50 M USD - an amazing level for the video surveillance market. Equally interesting is the investment from a publicly traded company - ESCO Technologies [link no longer available] ($1 Billion USD market capitalization and over $600 Million USD annual revenues).

As we reported in August 2009, while 60% of Firetide's revenue comes from video surveillance projects, they are aggressively expanding into other markets, especially Smart Grids for utilities.

ESCO is a notable step in expansion towards Smart Grids. In conjunction with the investment into Firetide, ESCO announced a strategic alliance agreement with Firetide [link no longer available]. Specifically, ESCO has a solution called the Alcara Smart Communications Network. Firetide wireless technology will facilitate that communication for utility users. For more background on ESCO and their Alcara solution, see their 2008 annual report [link no longer available].

Smart Grids are 'hot' right now. Cisco, for instance, projects just the communication portion of smart grids to be a $20 Billion USD annual market [link no longer available]. A research analyst is projecting the market to be $17 Billion USD [link no longer available] by 2014.

Given the very high level of investment in Firetide (relative to the video surveillance market), it is likely critical that Firetide expand significantly outside of video surveillance. Our market is too small to support the revenue levels needed to support a $100 Million plus valuation (probably necessary for Firetide's investors for the company to be a success). This would be difficult for a video management or camera provider but even harder for a company specializing in a niche within a niche (wireless systems for video surveillance).

[Update 2012: Firetide has not announced any further funding. However, the company's marketing and industry presence has declined significantly. Additionally, their CEO has departed.]

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