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

Large Hospital Security End User Interview on Mar 21, 2019
This large single-state healthcare system consists of many hospitals, and hundreds of health parks, private practices, urgent care facilities, and...
Silicon Valley Cybersecurity Insurance Startup Coalition Profile on Mar 20, 2019
Many industry people believe cybersecurity insurance is not worth it, as the voting and debate in our Cybersecurity Insurance For Security...
City Physical Security Manager Interview on Mar 14, 2019
This physical security pro is the Physical Security Manager for the City of Calgary. He is a criminologist by training with an ASIS CPP credential....
BCDVideo Expansion And Switch From HP To Dell Examined on Mar 11, 2019
BCDVideo says they have more than tripled revenue in the past 5 years and are continuing to grow, powered most recently by switching their lead...
Start Up Safe Zone $150 Gunfire Detector Profile on Mar 06, 2019
While gunfire detectors have been around for years, typically they are limited to enterprise level or municipal deployments. Startup AVidea, makers...
What Is the Importance of Revenue vs Profitability for Integrators? Statistics on Mar 01, 2019
A company can be highly profitable but if it is small, they will still not make much money. By contrast, a company can generate lots revenue, but...
BluB0x Company Profile on Feb 20, 2019
BluB0x has doubled in revenue every year since its founding in 2013, according to CEO Patrick Barry. We originally reported on them in 2015. At the...
Solink Raises $12 Million - Company Profile on Feb 12, 2019
Most industry professionals have never heard of Solink, a company whose tagline is: It's time to revolutionize the way business uses...
Barnes Buchanan 2019: Despite 'Strange Narrative' Great Time To Be In Security on Feb 11, 2019
A "strange narrative" is being spun, said Michael Barnes at the 2019 Barnes Buchanan Conference. However, despite that narrative, it is a "great...
Surging Wyze Raises $20 Million, Threat To Chinese Brands on Feb 01, 2019
The Seattle Startup that is disrupting consumer IP cameras with $20 pricing has just raised $20 million dollars (SEC Filing and company press...

Most Recent Industry Reports

Eagle Eye Favorability Results 2019 on Mar 21, 2019
Eagle Eye has been the biggest spender in the cloud VMS market including (via their owner) acquiring Brivo for $50 million and CameraManager from...
Large Hospital Security End User Interview on Mar 21, 2019
This large single-state healthcare system consists of many hospitals, and hundreds of health parks, private practices, urgent care facilities, and...
Silicon Valley Cybersecurity Insurance Startup Coalition Profile on Mar 20, 2019
Many industry people believe cybersecurity insurance is not worth it, as the voting and debate in our Cybersecurity Insurance For Security...
Covert IP Camera Shootout - Axis, Hanwha, Hikvision, March, Vivotek on Mar 20, 2019
Covert cameras were one of the last holdout areas for analog cameras. However, in the past few years, IP / HD covert cameras have become...
Top Metrics For Ensuring Integrator Profitability - Statistics on Mar 20, 2019
How do integrators ensure the profitability of their projects? As part of our profitability study, 100+ integrators answered the following...
Avigilon Launches 'Renewed Products Program' on Mar 19, 2019
There are lots of 'pre-owned' cars but pre-owned IP cameras? While such programs are common in other industries, in video surveillance, they are...
Hanwha Tax Evasion Probe, Camera Division Implicated on Mar 19, 2019
A Hanwha group subsidiary was raided as part of a tax evasion probe. While a Korean news media report listed the raided entity as 'Hanwha...
Genetec Security Center 5.8 Tested on Mar 19, 2019
Genetec has released Version 5.8. This comes after a wait of more than a year that caused frustrations for many Genetec partners. Our previous...
Retired Mercury President Returns As Open Options President on Mar 18, 2019
Open Options experienced major changes in 2018, including being acquired by ACRE and losing its President and General Manager, John Berman who...
Large US University End-User Video Surveillance Interview on Mar 18, 2019
Schools have become targets in modern days of active shooters and terrorist fears. The need for video and access security is high. Universities...

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