This article originally appeared in the February 2022 issue of Security Business magazine. When sharing, don’t forget to mention Security Business magazine on LinkedIn and @SecBusinessMag on Twitter.
If you follow the security industry headlines, you will see that some very large numbers for venture capital (VC) funding are being thrown around. It is coming from sources ranging from angel investors to strategic partnerships, and the funding has been from tens to hundreds of millions of dollars.
A few to note:
- AI specialist AnyVision (since renamed Oosto) secured an investment of $235 million in July 2021 from SoftBank Vision Fund 2i and Eldridge, with further participation from existing investors.
- Flock Safety, a public safety operating system for cities to work with private communities and law enforcement announced a $150 million Series D fundraise in July 2021, led by Andreessen Horowitz and several existing investors.
- HiveWatch, makers of a “Security Fusion Platform” that brings together data from disparate security systems to form one intelligent, holistic and actionable view, closed $20 million in additional growth funding in October 2021, led by a star-studded group including former Twitter CEO & COO Dick Costolo and Adam Bain of 01A, with participation from Lachy Groom, Elad Gil, and Penny Jar Capital (a fund anchored by NBA star Stephen Curry).
- RemoteLock, an access control software platform provider, announced in January that it has raised $17.8 million Series B funding, with UnitLeader leading the round, joined by current investors Kozo Keikaku Engineering Inc. (KKE) and Iron Gate Capital.
The list goes on and on, but it signifies a very strong trend – that even during a worldwide pandemic, investors have opened their pocketbooks instead of circling the wagons in an effort to spend less.
This month, I took a different approach to the Tech Trends column and sat down with Ryan Schonfeld, Founder and CEO of Hivewatch and RAS Watch (a GSoC as a Service offering) to discuss this trend.
COVID’s Effect on Tech Trends
The reality of the pandemic is that companies have been forced to adapt. Workforces have been distributed; yet a duty of care is still required. Companies are being forced to invest in technology when the expectation of having of a worker onsite is questionable at best.
By leveraging technology with Artificial Intelligence (AI) or Machine Learning (ML), security programs have been optimized. This has forced many companies who would not have embraced edge technology to now shift to even more edge-based applications; as well as technology that can be monitored and interacted with remotely. This has companies thinking outside of the box for new ways to increase services when human capital is at a premium.
Many of these companies are using technology to generate data and to streamline their security program, creating a more nimble operation. “In physical security, there are new avenues of data every day that are important to organizations to build holistic analysis to protect people,” Schonfeld explains. “Fusion is the future of security and emerging tech.”
This fusion is finding support from businesses who are desperately seeking a solution to balance people and technology; a way to streamline efficiency and effectiveness.
The VC Funding Surge
Technology is finding support from investors who see a change to the status quo.
Schonfeld and I agree that in the past, there were few VCs to gamble on the security industry space due to antiquated technology. Fast forward to today, physical security is on the radar of many VCs. “Verkada and others helped VCs see an opportunity to disrupt, as well as COVID forcing companies into the new normal,” Schonfeld says.
Couple that with social issues post-George Floyd – both peaceful and non-peaceful demonstrations – that have caused companies to reevaluate their security and business continuity objectives. The venture capitalists are looking to make a difference by investing in products that bring business intelligence to security and all the other stakeholders as well.
“With the pandemic, the security industry desperately needed to make changes to the way they operate to better protect their employees and assets,” Schonfeld says. “It has been lacking innovation, industry insiders with new perspectives, diversity and more. We haven’t seen an update to the landscape in more than a decade. Hivewatch is a game-changer, and that’s why venture capitalists want in on it.”
Security Industry Success
There is a shift happening in the security industry, like it or not. The market has new players entering at a rate like never before – many from outside the traditional security industry market. Innovation is happening at never-before-seen levels. Couple all of this with an overt push by the end-user for companies to meet their challenges, it will require the industry to step up and adopt new tools and techniques to meet the demand. The VC investments in the security industry space have raised the bar for success.
The last two years has forced the security industry as a whole to rethink its go-to-market strategy. What is apparent is in that strategy, the customer no longer wants just a service provider or even a “shiny new thing” – instead they are seeking partners to help them support the evolution of their business.
Businesses across all verticals are clamoring for good partners to help with their digital transformation. This has evolved past convergence from analog to IP; and past SaaS to a true convergence of security and data solutions.
Hivewatch and other security industry technologies that have adopted a method of disruption are finding success with not only the security director, but in the C-Suite with both the CTO and CISO. Adoption of security technology and the right partner that will meet customer internal and external objectives – including cybersecurity initiatives – are moving to the front of the line for adoption.
Ultimately, the security industry is seeing a tech trend: A migration away from single-output technology. Big Data, the digital transformation and business intelligence have brought forth an adoption of technology that is disrupting the traditional security industry; and for some, creating big-dollar investments. What appears to be certain is there is no slowdown of this trend in the near future.
Jon Polly is the Chief Solutions Officer for ProTecht Solutions Partners www.protechtsolutionspartners.com, a security consulting company focused on smart city surveillance. Connect with him on linkedin: www.linkedin.com/in/jonpolly.