Eagle Eye Networks, Brivo announce $192 million SECOM investment

AUSTIN, Texas, and BETHESDA, Md.—Eagle Eye Networks and Brivo today announced one of the largest investments to date in cloud physical security as Japan-based security integration company SECOM CO., LTD, has made a primary equity investment of $192 million in the two companies.

Eagle Eye Networks and Brivo are independent companies majority owned by Dean Drako. Drako founded Eagle Eye Networks in 2012 and serves as CEO; he acquired a majority stake in Brivo in 2015 and is currently chairman.

"The SECOM investment underscores that cloud and Al are the future of physical security," Drako said. "Both Eagle Eye and Brivo will use a significant portion of the investment to further develop Al that dramatically improves the security of enterprises and businesses globally. The Eagle Eye and Brivo open platforms provide customers with choice, efficiencies, and innovation, all of which this investment will accelerate."

As independent, open platform companies, Eagle Eye Networks and Brivo integrate with many third-party technology providers, including the leading property management and Proptech platforms. In addition, Eagle Eye and Brivo provide a fully integrated solution that global businesses use to manage risk, identify threats, and respond. The companies' joint capabilities deliver real-time Al-enabled video and access control events analysis, optimizing safety and security.

“SECOM has a proud history of innovation going back to Japan's first online security system for commercial use in 1966,” said Sadahiro Sato, SECOM managing executive officer. “We’re committed to delivering services and systems that deliver safety, peace of mind and business efficiency. Our investment in Eagle Eye Networks and Brivo, the market leaders in cloud physical security, is an investment in the mission our three companies share: to provide the best technology possible to keep businesses and communities safe.”

Opportunity

Drako told Security Systems News how the investment came to fruition after about a nine-month courtship.  

“SECOM is one of the largest, if not the largest, security companies in the world. They are a traditional kind of security company in that they don't do a lot of product, but they do the installation, service and etc. They are very dominant in the Japanese market,” he explained. “Eagle Eye entered the Japanese market six or seven years ago, and we've been slowly building our brand and our success here, with all kinds of different customers and with lots of smaller integrators. That clearly was noticed by SECOM. They became aware of the quality of our product and the success that we had in the Japanese market and the reputation that we had in the market for goodness and quality and service and etc. That was, I'm sure, part of the initial discussions.

“Then obviously I introduced Brivo into that equation as well, given my ownership and the partnership between the two companies. Brivo has not been aggressive in the Japanese market, and access control is a little different in Japan than the rest of the world; the players in the Japanese market are different. Regardless, that kind of initiated things, and SECOM has a desire to Increase its overseas presence and expand overseas.

He continued. “They realized through a market study and extensive research that the cloud is a disrupting force in both access control and video surveillance globally, and when you have a disruptive force, that creates opportunity, just like in the automotive industry, where we have a disruptive force of electrification that created an opportunity for Tesla to enter the market. They realized that there's an opportunity, and that both Eagle Eye and Brivo are using that opportunity to create a tremendous opportunity to enter the market which otherwise would have been more difficult.

“If Brivo was selling a traditional access control system, or Eagle Eye was selling a traditional video surveillance system, our ability to differentiate and compete would be a little harder. They saw that both Eagle Eye and Brivo were at the top of the market, if not the biggest player or the most successful player, clearly the market leaders in their respective categories. And so they proposed an investment, and we were interested in such an investment because of the capital that that will give us to expand our market reach, as well as the strategic partnership that SECOM offers with their strong Japanese footprint, but also their very global kind of footprint in the Asia-Pacific region. They're a strong player in Taiwan, Korea, Singapore, Thailand, Vietnam, and more.”

Investment

Eagle Eye Networks will use the investment for continued development of its Al-based analytics capabilities such as Eaqle Eye Smart Video Search, Smart Alarms, and Vehicle Intelligence, and to expand its worldwide operations.

Brivo will use the investment to grow sales and marketing, accelerate product development and scale support and operational functions, and evaluate strategic acquisitions. Brivo will also use the additional investment to continue expanding in Europe, Latin America, and Asia Pacific, and enhance the smart spaces and Al functionality in the Brivo Access Platform for its enterprise, multifamily, and commercial real estate customers.

“I believe that disruptive kind of factors create tremendous opportunity for new players to enter the market and have impact,” Drako noted. “I believe that there are two disruptive factors simultaneously hitting the video surveillance industry. One is the AI component and two is the cloud conversion, and that creates a tremendous tsunami of change.

“Eagle Eye has been investing in the AI component, as well as the cloud component, but as you can imagine, the AI component requires some additional capital. One of the big pieces of investment for Eagle Eye is additional AI that we're going to be applying.

“I believe that the video surveillance industry is going to change such that no one wants to buy a VMS that doesn't have a tremendous amount of AI incorporated in it because they want to buy a solution. And that solution is a video recording solution, a video management solution, and the AI that runs on top of it to detect what they care about so that they can remedy it in a timely manner. That AI might be fire detection. It might be gun detection, it might be slip and fall detection. It might be graffiti detection. It might be LPR for cars and vehicle counting, or a spill in aisle 14 in the fruit juice section. Who knows what that AI is going to be, but the customer is going to be interested in buying a video surveillance solution that incorporates all of that. And so, I'm off and building that new product, which is the AI VMS so to speak, and that takes additional capital. The access control with AI incorporated into it is clearly going to be the product that customers want to buy. And so Brivo is going to be investing in the development of additional AI to detect anomalies in behavior.”

Drako continued. “Now given that both Brivo and Eagle Eye are so disruptive in the industry in their respective industries, and the opportunity is so large to upset those industries, we need to also invest in sales expansion, marketing expansion and regional sales expansion. So international growth - sales people in Canada, sales people in Europe, sales people in Italy - offices in these locations to open up the business similar to what you saw with the expansion of Tesla, the expansion of Uber, the expansion of disruptors. Capital is needed in order to drive that global expansion and that domestic expansion. People have to learn about your product - you have to explain it, you have to support it, you have to sell it to them, and that takes people training in order to drive out and get in front of those customers.”

In terms of how the investment will impact cloud conversion, Drako noted, “We don't have to invest so much in the engineering and the deployment of hardware for the cloud conversion because we've already done all of that. Brivo has a cloud solution. It's global. Eagle Eye has 11 data centers around the globe already that we've built and deployed. We may deploy a few more, so some small amount of the capital will be used for cloud expansion and cloud reach. But it'll be modest in size compared to the investment in the AI components.”

“Now it does create the cloud conversion, which we're just really beginning in both industries. It still contributes to that opportunity that we need to invest in the sales and marketing front in order to get in front of the customers and explain why cloud is better, it's more reliable, it's more cyber secure and it's got higher redundancy, it's not subject to power outages, you don't need to back up your computers, that it's not this little box in the basement that's forgotten about, that it's easier to maintain, it's got built-in central management and all those kinds of things that customers care about. You have to get in front of them and explain it, so that's what we're going to do.”

Impact

Drako explained how SECOM’s investment in Eagle Eye and Brivo will impact the cloud video surveillance and AI video analytics solutions that both companies provide.

“This investment will give us the capital to invest further in the AI and the cloud, and it will also offer an opportunity for a strategic partnership with SECOM on the development of product, as well as go to market,” he said. “SECOM has a powerful sales force, which will obviously want to help promote Eagle Eye, and they're doing that not just because of the investment, but because they believe in the quality of the product, and they believe in the conversion to cloud for the majority of their customers and the importance of AI to those customers.”

When asked how SECOM’S investment could be a game-changer in the physical security space, the CEO responded, “I think it's indicative of the recognition that the physical security industry is very relevant in this new technology world. I think that very few major investments have been made in the physical security industry over the last 10-15 years. Even though the technology has moved forward, the traditional technology investor has not paid attention to the physical security industry. I believe that in the last year or two, that has started to change, and the physical security industry is coming much more into the spotlight than it has been before from the technology world and the banker world and the Wall Street world.

“I think the financial and tech world has kind of realized that there's some big opportunity here with the technology shifts of going to the cloud and AI, and they've now kind of woken up and want to pay attention, and I think SECOM is just indicative of that.”

He concluded by saying, “I believe that this is the largest real investment in technology for the physical security industry ever, and so that's pretty exciting, right? It's a change in the winds for our industry, which I think is a good thing. I've been on kind of a mission now for 10 years to bring more advanced technology and the cloud to the physical security industry, and I feel like my 10 years is actually starting to show results. I'm feeling pleased about that.”