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 years ago, PSA Security CEO Bill Bozeman called security robots one of “the biggest game changers” in decades for security integrators. Just...
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

Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
CES 2019 Show Report on Jan 10, 2019
IPVM was at CES 2019 for the second year (see our CES 2018 Show Final Report) and is reporting on announcements and interesting news from the show...
Motorola Acquires VaaS / Vigilant LPR on Jan 08, 2019
Less than a year after Motorola Solutions spent a billion to acquire Avigilon, the company has made another major acquisition spending nearly a...
European Startup Ajax Profile - They "Stand Against Evil" on Jan 03, 2019
European intrusion detection startup Ajax Systems proclaims: How are they standing against evil? And what are the differentiators and potential...
The Battle For The VSaaS Market Begins 2019 - Alarm.com, Arcules, Eagle Eye, OpenEye, Qumulex, Verkada, More on Jan 02, 2019
2019 will be the year that VSaaS finally becomes a real factor for professional video surveillance. While Video Surveillance as a Service (VSaaS)...
Combating Vaping Epidemic - Halo Smart Sensor Profile on Dec 21, 2018
Youth vaping has become an epidemic, according to the US Surgeon General, while the market leader, Juul, just received a $12.8 billion investment...
SS&Si Claims To Be "The New Face of Security Distribution" on Dec 03, 2018
Can 27-year-old Jake Voll disrupt the security distribution giants? He has positioned his company SS&Si as the 'NEW FACE' of...
ISC East 2018 Mini-Show Final Report on Nov 16, 2018
This is our second (updated) and final show report from ISC East. ISC East, by its own admission, is not a national or international show, billed...
Haven Targets School Security with Lockdown Lineup on Nov 08, 2018
Haven, a US startup founded in 2014 as a residential-focused company, has now raised funding and is offering a lineup of commercial grade locks for...
Directory of Access Control and Intrusion Startups on Oct 30, 2018
This directory catalogs access control and intrusion detection startups IPVM has found noteworthy. The directory is provided for your review to...

Most Recent Industry Reports

Access Control Records Maintenance Guide on Jan 16, 2019
Weeding out old entries, turning off unused credentials, and updating who carries which credentials is as important as to maintaining security as...
UK Fines Security Firms For Illegal Direct Marketing on Jan 16, 2019
Two UK security firms have paid over $200,000 in fines for illegally making hundreds of thousands of calls to people registered on a government...
Access Control Cabling Tutorial on Jan 15, 2019
Access Control is only as reliable as its cables. While this aspect lacks the sexiness of other components, it remains a vital part of every...
Avigilon Favorability Results 2019 on Jan 15, 2019
Since IPVM's 2017 Avigilon favorability results, the company was acquired by Motorola and has shifted from being an aggressive startup to a more...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
2019 IP Networking Book Released on Jan 14, 2019
The new IP Networking Book 2019 is a 285 page in-depth guide that teaches you how IT and telecom technologies impact modern security...
Arecont Costar Layoffs on Jan 14, 2019
Arecont Vision, a Costar Company, has laid off more than 10% of their workforce in a move the company described to IPVM as a result of "important...
The False SCMP Story on Hikvision NYC AI on Jan 14, 2019
In the past week, one of Asia's largest publications, the South China Morning Post (SCMP), posted an article about "Chinese [facial recognition]...
WDR Tutorial on Jan 11, 2019
Understanding wide dynamic range (WDR) is critical to capturing high quality images in demanding conditions. However, with no real standards, any...

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