Knightscope $420,425 2016 Revenue, $5+ Million Loss Seeks $20 Million Investment
By: John Honovich, Published on Dec 09, 2016The robot that ran over a child, Knightscope, wants money and they need it.
Investors can invest as little as $1,000 to participate and Knightscope is hoping for a total of $20 million.
Knightscope's 1K filing lists their current financial situation:
- 2016 revenue at $420,425 ($0.42 million)
- 2016 expenses at $5.6 million, loss of $5+ million
- The company reports 9 total clients and 15 total machines / robots in operation
- Cash remaining was $4.5 million as of June 30, 2016
An $80 million pre-money valuation has been set, up from $45 million in their Series B round completed 6 weeks ago. Knightscope also has touted $60+ million 'investor interest' but that was an unvetted marketing stunt.
Also, these new investors will have less rights than existing shareholders as the filing explains:
The Series m Preferred Stock will also have no series-based votes or protections. Therefore, investors in this offering will not have the ability to control the board of directors and will not have significant ability to control any specific vote of stockholders.
Is that a good deal? If you think their robots are going to take off and see hockey stick growth, sure. And they are ambitious, aggressive marketers who have done a great job of getting people excited about the science fiction aspect of robots and their hope to cut crime by 50%.
On the other side, it is not clear how their robots are going to solve crime or even be more than just surveillance cameras on a scooter. And at ~$60,000 per year per robot, it is too expensive for most organizations to be a gimmick. The bet here is that Knightscope can transition from its media appearances to actual everyday business benefits for regular security operations.
For more on robots, see our coverage:
- Knightscope Security Robot Examined
- Gamma2 Ramsee Security Robots
- Cobalt Security/Office Robot Examined
- Sharp Security Robot
- Russian SMP Security Robot
- Flying Security Guard Startup Aptonomy
Update August 2017: SeedInvest reports that Knightscope has raised $10 million. That's an average of ~$3,333 per investor given the 3,000+ investors SeedInvest reports has participated.
10 reports cite this report:
Comments (47)
60,000 per year is where its gonna fail. You can hire a human for that? If im gonna buy a robot, its gonna be because I can save salary costs over a human.
The fallacy that I see with these robots over and over again is the belief they can operate autonomously. That's not the case. There still is a guard or someone else watching the video feed or alert events. Even if that guard is watching 10 robot feeds they still have a cost. If the robot could call the police or deploy pepper spray autonomously it may be a different story.
Watching their one video, a brand new work van?
Looking at it all, for only being 2-3 years old, their expenses are out of control and not managed very well.
Each executive making north of 70-100k/yr is not smart for a startup. If the robots were selling like hot cakes, sure, pay the execs 100k+...but theyre not, and they need to be paid based on sales performance.
I like children that aren't run over and for that reason, I'm out.
If this robot can kill rats and vacuum while it roams around in the middle of the night it my be of some use. It also needs to be able to use an elevator and turnstile gate. Integrations with other building systems such as lighting, HVAC and Fire can be monitored and optimized. Gee, I just cannot wait to get my first parking ticket from one of these bad boys(email form only please).
From the investor call:
Knightscope says cost of building a K3 or K5 robot is in the range of $55,000 to $65,000.
Expected revenue for full 2016 is $600,000 to $1 million. Target revenue for 2017 is $5 million
A strange announcement from Knightscope: "Knightscope Announces the K7 Autonomous Data Machine"
The headline would give people the impression that this unit is done or close to being done. But then the body explains:
Knightscope is very excited to have commenced development work on the all new Knightscope K7
This is really pushing it, especially since as their own investment circular explains, they will not have the money for the development unless they raise $10 million in the current campaign, excerpt below:
It is also not clear if $1 million is enough for the K7 development, since their $15 and $20 million investment milestones list far more spending on the K7.
Knightscope has competition on the 4 wheel side, with both Sharp and SMP focusing there.
More than 80% of our components are manufactured in the United States.
With the other 80% coming from China:
More on their sales projections:
A day after announcing that Knightscope has started development of the K7 4 wheeler, they are now claiming it is in 'production' in a new 'investor' email:
This is a peculiar way to describe the K7 since 'production' means ready to deliver to customers, while where they are at is at the opposite end, the start of development.
Update: Knightscope new financial details for 2016 and Jan 2017 released:
Eight of the contracts were executed through December 31, 2016 representing $669,758 of total contract value and three additional contracts were executed during January 2017 with a $404,923 total contract value. Including these contracts and based on unaudited operating results, the Company’s revenues were in excess of $400,000 through December 31, 2016.
So 2016 total revenue of $400,000 vs $80 million pre-money valuation for a fairly rich 200x price to sales ratio.
For January, about 6-7 robots contracted to 3 customers. On the plus side, someone is buying them. It will be interesting to see how well they scale up sales.
Knightscope says they are producing their 50th robot. As of December when this post was released, Knightscope claimed 15 in operation and a undisclosed number for demoes / testing / beat up by drunks etc.
Update: Knightscope is now reporting 2,000+ investors though the total amount invested across them is not disclosed. The $20 million fund raising has now been open for more than a half year.
Here is one example of their investors from their SeedInvest discussion:
It will be interesting to see how many literal 'mom n pop' investors they get.
A saw this product at ASIS, and it seemed that every time I passed by, there was a tech working on it.
Update: This 8 month old post has gotten ~2,000 reads in the past week, ~90% via search. This post is a 1st page result for Knightscope, which contributes and, of course, the drowning robot.
The question is: Is this burst of interest in Knightscope good for the company overall?
It looks like Knightscope may be doing well with random people, an email sent to us:
Evidently, he visited this report and thinks we are either Knightscope or associated with them. His due diligence is not good.
Update: SeedInvest just reported that Knightscope has raised $10 million. That's an average of ~$3,333 per investor given the 3,000+ investors SeedInvest reports has participated.
Knightscope is still seeking $20 million max and has to October 10th to do it.
Cough...Cough...someone is bluffing at Seedinvest. Who in their right mind wouldnt do their due diligence with investing?