Managing security camera systems might not seem like an obvious area for one of Silicon Valley’s most competitive funding rounds in recent weeks. But that’s the case with Verkada, a startup that just raised a funding round at a $540 million valuation after just two years in the market.
The San Mateo, California, company announced on Thursday it had raised $40 million in a Series B funding round led by Meritech Capital Partners and Sequoia. The round, which comes just a year after it announced its previous $15 million raise, values the company at $540 million.
Founded in 2016, Verkada has been selling products only for the past two years but has built a roster of customers including school systems, gyms, municipalities and corporations like Citrix and healthcare providers, CEO Filip Kaliszan says. The company offers a hybrid software and hardware solution including the cameras themselves as well as software that streams the feeds over the cloud for users to monitor and share. Verkada declined to disclose its revenue, but customers spend hundreds of thousands, if not millions, on the service. With its headcount growing from 11 to 90 in the past year and sales “trending multiples higher than the first year,” it’s reasonable to guess Verkada is taking in tens of millions of dollars in sales.
“With all the innovation happening on the consumer side with cameras, people are used to a higher tier of experience,” says Kaliszan. “We come in and say, okay, this is how you bridge the gap.”
How Verkada is different from the established players in the market like Tyco and Honeywell starts with its cameras. Each stores footage locally, functioning like its own digital video recorder, and is encrypted at rest, meaning that it doesn’t lose its feed when the internet cuts out and won’t cough up its info if someone steals a unit. On the software side, Verkada provides a dashboard that shows every camera and allows users to click into their feeds. A highlighting tool allows users to send alerts only when people move, or walk through, certain areas within a camera’s view. And those feeds are securely shareable with outside guests, such as law enforcement, over set periods of time.