Investing in Verkada

Amid a climate of rising theft, high-profile tragedies in traditionally safe spaces, and a shift in police resources away from non-violent crimes, building security teams must increasingly rely on their technology and protocols to protect people and assets. In addition, legacy on-premise physical security systems offer limited visibility and often do not deter crime or provide adequate security, leaving many offenses unchecked.

Modern physical security requirements extend far beyond the installation of video security cameras. Today’s buildings need access controls, sensors, and alarms that work in tandem to ensure the right people have access to the right spaces, accurately account for people and assets that move through buildings, and provide rapid alerts to facility managers and authorities when irregularities or breaches occur. Enterprise security teams must also be able to remotely access critical system data across distributed assets from anywhere in the world in real-time.

Linse Capital is excited to partner with Verkada to help build this vision of advanced physical security. Their integrated video security cameras, access control, environmental sensors, alarms, visitor management systems, and mailroom systems provide visibility through a single, secure, cloud-based software platform. Verkada designs and engineers its entire product stack (both hardware and software) in-house, enabling them to finetune the user experience in ways that are difficult to replicate using a hodge-podge of third-party products. Their expanding combination of high-quality hardware and proprietary software dredges a competitive moat in a market full of commoditized products and services.

Verkada’s approach to video-surveillance-as-a-service (VSaaS) gives customers access to the latest features through regular software updates, along with the peace of mind that comes with a generous warranty and attentive customer support.

However, the industry’s transition to VSaaS has not always been popular among traditional physical security integrators — the companies that install new security systems, devices, and other components. As VSaaS companies gradually reshape the customer-integrator relationship, integrator roles will shift from the front lines of technical customer support toward a project initiation and consultancy service model. In the not-too-distant future, we believe integrators will focus more on serving a larger number of new customers as VSaaS providers send them a steady stream of qualified prospects.

Upending the status quo in the enterprise physical security space is no small task, so we admire executive chairman Hans Robertson and CEO Filip Kaliszan’s substantial experience starting and scaling disruptive businesses. As one of the fastest-growing companies we’ve ever come across, we believe that Verkada fits in nicely with Linse Capital’s history of investing in market-leading potential companies capitalizing on long-term secular growth trends.

However, smarter security and safer buildings are only the beginning of Verkada’s potential to improve the quality of occupied infrastructure. We see a future where building comfort, energy efficiency, multimedia, and more are all managed under a single pane of glass. This vision of an end-to-end infrastructure operating system can give enterprises the control they need to protect people, assets, and privacy and keep people comfortable and connected across their entire building footprint.

Verkada endeavors to become an enduring company of segment-leading products across multiple categories that work together seamlessly. While there is still a great deal of work to be done, we recognize their long-term potential and believe they are up to the challenge of building a company that provides best-in-class physical security for decades to come.

This material presented on Linse Capital’s blog is for informational purposes only and should not be construed as legal, tax, accounting, or investment advice. Under no circumstances should any material on this blog be used for or considered as an offer to sell or a solicitation of any offer to buy an interest in any securities or investment fund. Any analysis or discussion of financial planning matters, investments, sectors, or the market generally are based on current information, including from public sources, that we consider reliable, but we do not represent that any research or the information provided is accurate or complete, and it should not be relied on as such. Our views and opinions expressed on this blog or in any posted content are current at the time of publication and are subject to change.

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Linse Capital

Linse Capital is a growth equity firm focused on industrial technology companies, in sectors such as transportation, energy, logistics and real estate.