Pivot3 Raises $23 million / Refocuses

Author: John Honovich, Published on Feb 07, 2012

Last year, we raised concerns that Pivot3 was pivoting away from the surveillance business. Now, Pivot3 has raised a major fundraising round of $23 million lead by Samsung. In this note, we examine how this impacts Pivot3's positioning and why Pivot3 says this show renewed committment and improved focus on the surveillance market.

Let's start with a review of key points:

  • **** $** ******* ****** ***** ****** **** ******* ** ~$*** million. *********** ***** *** $** ******* ****** * ***** ***.
  • ** **** ** *** *******, ****** ** ********* * *********** with ******* *******, * *********** ********* ****/******** ********.
  • ****** ** ********** ** *** **** *** ** *** ***** surveillance ****** ****** **** *** ******* ******** ** *** **** few *****.

** ***** ****** ***** ***** ***** *** *** ************ ******. They ******** **** ******** *********:

"*** **** ** **** $*** ******* *****, *** ************* ** Samsung, *** *** ********* ** **** ****** ** **, ******** Development ************ *** ***** ********** ** *** ********** ** *** surveillance ******. ** ****, ** ******** **** *** *** * bit *** **** ** **** ************ *** **. ***, **** the ********** ** ****** ***** ********* *******, **** *******, ** **** ******** ** *** ***** ***** **** **** us *** *** ******** ** ** **** ** *** ******. Here *** **** ********** ** *** ** **** **** *** hand ** ****.

** *** ******* "*****" ** *** ************ ******, ******** ** larger, *********** ************ ************* **** *** ******* ** *** **************, government, ****** *** **** ************ ******** *******. ***** ******* ******* benefit **** *** ***********, ********** *** ******* ******** ** *** Serverless ********* **********. *** *** ********** ** * *****-***** ******* team ** **** ****** *** ***** ******* *******-******** *******.   

** *** *** ********* ** *********** ****** ********* ******** * huge *********** ****** *** ***** ** ********* *** *********** **** to ******** **** ******* ************. **** *** **** ** *****, integrators *** ******* ***** ******** ** ****** ***** ***** ** customers ****** **** ***** ** **** ******* *** ********* *** the ********* ** ** *****. **'** ***** ***** ** *** UK, *****, ***********, *********, *****, ******, *** **** **** ** capitalize ** **** ****** ****** ******.

*** *********** **** ***** ***** ** **** **** **** *** company *** ** **** ******** ** ****** ** **** ******** engine ** **** *** ******** ******. **** ******** *** *********** team ***** * ****-********* *** ** ********* ***** ********** *********** into *** ************ ****** ******* ********* *** ***** ** *** appliances. ** **** **** ** **** **** ***** ****** ********** across *** ******** ** ** **** ****** **** *** ******* performance ******** ********* **** *********** ******** **** *** ****** ****** EMC." 

Our ********

****'* *** **** ********:

  • Funding ****: The large round gives Pivot3 resources to dedicate on surveillance which improves their capabilities relative to last year.
  • Focus ** *** **** ***: This is likely a necessary and positive action as it as very hard to differentiate on small to mid sized projects (16, 32, cameras, etc.), especially with the VMS vendors increasingly releasing their own boxes/appliances.
  • Competing ******* ********** *** ***** ********: Incumbent CCTV companies are not strong at providing large scale storage, typically OEMing general purpose storage offerings. There are few specialists targeting this market segment (e.g., Intransa, ***).
  • Samsung ************: We are not sure what value the Samsung relationship will bring specifically in security. Samsung is a traditional strong CCTV player but we do not see their core user base of small to mid size projects overlapping well with Pivot3's core strengths.
  • Long **** ******: While raising more money gives a greater runway, it also increases the expectations of future revenue/profitability that investors have. Now at $100 million+ in funding, it will be interesting to see how it can justify its valuation. Certainly, Pivot3's expansion last year to the general IT market is a needed step in accomplishing this. On the other hand, while focusing on the high end of the surveillance market is likely more efficient, it does narrow the overall market opportunity.

Product ***********

*** ******* *********** ** *** ******* **** ** *** **** year ** *** ************ ** ******** *****, ***** ** *********** *** **** ********** ** ************** ******. **** *** *********, ** ************ ** ******** ******* ******. However, *** ***** ***** **** ****** *** ******** ***** ***** CloudBank **** *** *** ************** *** **** *** ******* *****.

******

** ***** ****** ***** *** **** *** *** ***** ******:

"*** **** ********* ******** ****** *** **** ** *********** ****** our ************ ********* *** *** *********** ***** ** *** *** partners *** ******* ************ ** ******.  ** **** ***** ******* the ***** **** *** *** *** ******* **** ***** ******* Vmware *********.  

*** *** *********, *** *******, ** ***** ****** ********** ***** software **** *** *** ************, ** *** **** ****** *** been ****** **** ******** *****."

** ** **** *** ********** **** *** ********* **** ***** support ******. ****, ***** *************** ******* ******* / *** ****** can ** * **** **** (*** ************************ ****), ***** ****** ***** *****.

*****

** ***** ****** ***** *** **** *** *** ********** *****:

"** *** ****** ** ** *********** ** ******* *** ********* write **********. *** **** ********** ** *** ****** ** ******* per *** ******** ** *** *** * ***** ****. **** we **** ** **** **** ********** *** ************ ******* **** from ******* ************ ******* ***** ********, **** ** ******, **********, and ***, ** ******* **** **** * *********** ********. ** the **** ****, **** *** ************ *** **** ****** ** buffering **** ****** *** ****'* ** ********* ** *** ***** memory.  

** **** **** *** ******* *********** **** ***** ***** *** likely ** ******* *** **** ******* *** ******** ** **** most ******* **** ***, ** * ******, ** *** ******* scalable ***** ***** ** *** ** *** **********."

** ** *** **** ****** *** **** **** ********* **** specific *********** *********. *** *** **** ** ****** * *** manufacturer ********** ********** ***** *** **** *** ***** *** **** ********* *** ***** ********* *** version. *******, ***** ************ **** *** **** ******** ** ********.

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