Knightscope Rockets To $20 Million Funding

Author: John Honovich, Published on Oct 03, 2017

Knightscope is celebrating.

15 months after running over a child and 3 months after a Knightscope robot drowned, Knightscope is having the last laugh, maxing out their $20 million fund raising.

That is a lot of money for this space, especially relative to their competitors.

In this note, we examine the competitive impact of this fund raising and the future of the security robot market.

$20 Million Fund Raising

Knightscope's SeedInvest campaign ended on October 10, 2017, being fully subscribed:

Note: it does not show the full $20 million but SeedInvest says $20 million was reached (being processed) plus more on a wait list.

$10 Million More Cash Estimated

We estimate Knightscope will have ~$10 million more cash to use in operations going forward, factoring out the $5.6 million that was already raised in H1 2017, the multi-million dollar marketing expenditure for fund raising and the cut going to SeedInvest. Entering Q3 2017, Knightscope reported ~$2.7 million cash on hand. See Knightscope's H1 2017 S1A.

Get Video Surveillance News In Your Inbox
Get Video Surveillance News In Your Inbox

Define The Security Robot Market Short Term

For better or worse, Knightscope has far more money, brand recognition and ambition than any other security robot provider. In particular, this money gives them the ability to continue to get the most coverage, send out the most sales people and try the most different things. This is especially important when almost all other security robot providers are still trying to figure out product / market fit with small number of robots operational.

Risks For Knightscope

At the same time, there are still significantly risks for Knightscope. Despite the $15+ million Knightscope has already burned through, Knightscope only has 45 machines contracted as of September 18, 2017. There could be hockey stick growth and Knightscope may approach, as it hopes, some 600 robots by the end of 2018. The risks include:

  • $60,000 per year for a device that cannot climb stairs or carry on a conversation is a lot in a world where $15 per hour security guards are common
  • They still have not proven that customers are ready to deploy numerous of these devices as more than just a novelty / social media gimmick
  • Avoiding more social media 'incidents' that could strengthen the perception that these robots are not mature enough for real world use

More Than $20 Million Requires Ongoing Financial Reporting

While Knightscope said they would consider more than $20 million fund raising, they have one important reason not to exceed $20 million for the year - ongoing reporting requirements. The US SEC requires companies raising more then $20 million to file ongoing financial reports, as the SEC explains about Reg A fundraising:

Financial reporting for a small, high risk company like Knightscope can be risky, especially if they do not hit their numbers in the short term, as it would make it publicly very clear about their challenges.

For 2018

We expect to see Knightscope continue to aggressively market, like they have done previously, and even perhaps more with this infusion of funds. While we still think significant risks remain for Knightscope, and especially their small investors, Knightscope has set itself up to be the clear leader in security robots, if they can prove product / market fit, which is still quite questionable.

4 reports cite this report:

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...
Security Robot Sales Struggle on Mar 21, 2018
2 year ago, PSA Security CEO Bill Bozeman called security robots one of “the biggest game changers” in decades for security integrators. Just over...
The 2018 Surveillance Industry Guide on Jan 16, 2018
The 300 page, 2018 Video Surveillance Industry Guide, covering the key events and the future of the video surveillance market, is now available,...
MIT Biggest Failures: Knightscope Robots on Jan 02, 2018
From the prestigious Massachusetts Institute of Technology (MIT), the MIT Technology review has picked a security industry company among its...
Comments (11) : PRO Members only. Login. or Join.

Related Reports

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...
$25 Million US COPS SVPP School Security Funding Examined on Jul 24, 2018
The US Congress has authorized the School Violence Prevention Program (SVPP) to fund various security measures and training to mitigate active...
Directory of Video Surveillance Startups on Jul 18, 2018
This directory provides a list of video surveillance startups to help you see and research what companies are new or not yet broadly known entity...
Arecont Acquisition By Costar on Jul 11, 2018
Arecont Vision acquisition by Costar Technologies has been approved by the court, concluding the bankruptcy process triggered by Arecont's...
Cybersecurity Startup VDOO Disclosing 10 Manufacturer Vulnerabilities Starting With Axis And Foscam on Jun 20, 2018
Cybersecurity startup VDOO has uncovered significant vulnerabilities in Axis cameras along with many others not yet disclosed. In this report, we...
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...
Best and Worst ISC West 2018 on Apr 16, 2018
ISC West 2018 had strong attendance, modest overall new products, and a surge in Artificial Intelligence marketing. First, here are 20+...
Security Robot Sales Struggle on Mar 21, 2018
2 year ago, PSA Security CEO Bill Bozeman called security robots one of “the biggest game changers” in decades for security integrators. Just over...
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

Genetec Takes Aim At 'Untrustworthy' 'Foreign Government-Owned Vendors' on Sep 24, 2018
Genetec is taking aim at 'untrustworthy' 'foreign government-owned vendors'. This is not a new theme for Genetec as nearly 2 years ago, Genetec...
4MP Camera Shootout - Axis, Dahua, DW, Hanwha, Hikvision, Uniview, Vivotek on Sep 24, 2018
4MP usage continues to climb, especially for low cost fixed lens models. To see who was best, we bought and tested seven 4MP models from Axis,...
Alexa Guard Expands Amazon's Security Offerings, Boosts ADT's Stock on Sep 21, 2018
Amazon is expanding their security offerings yet again, this time with Alexa Guard that delivers security audio analytics and a virtual "Fake...
UTC, Owner of Lenel, Acquires S2 on Sep 20, 2018
UTC now owns two of the biggest access control providers, one of integrator's most hated access control platforms, Lenel, and one of their...
BluePoint Aims To Bring Life-Safety Mind-Set To Police Pull Stations on Sep 20, 2018
Fire alarm pull stations are commonplace but police ones are not. A self-funded startup, BluePoint Alert Solutions is aiming to make police pull...
SIA Plays Dumb On OEMs And Hikua Ban on Sep 20, 2018
OEMs widely pretend to be 'manufacturers', deceiving their customers and putting them at risk for cybersecurity attacks and, soon, violation of US...
Axis Vs. Hikvision IR PTZ Shootout on Sep 20, 2018
Hikvision has their high-end dual-sensor DarkfighterX. Axis has their high-end concealed IR Q6125-LE. Which is better? We bought both and tested...
Avigilon Announces AI-Powered H5 Camera Development on Sep 19, 2018
Avigilon will be showcasing "next-generation AI" at next week's ASIS GSX. In an atypical move, the company is not actually releasing these...
Favorite Request-to-Exit (RTE) Manufacturers 2018 on Sep 19, 2018
Request To Exit devices like motion sensors and lock releasing push-buttons are a part of almost every access install, but who makes the equipment...
25% China Tariffs Finalized For 2019, 10% Start Now, Includes Select Video Surveillance on Sep 18, 2018
A surprise move: In July, when the most recent tariff round was first announced, the tariffs were only scheduled for 10%. However, now, the US...

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