Knightscope Inc., which builds security robots that are already out on patrol in malls and hospitals in the Silicon Valley area, is launching a crowdsourced “mini-IPO” in which it aims to raise $20 million in funding.
The Mountain View, California-based company is using the Seedinvest platform to launch its campaign, after having previously raised $14.76M in five Rounds since being founded back in 2013 from investors including Plug and Play, Konica Minolta, QueensBridge Venture Partners and Bright Success Capital. To date, more than 2,000 potential investors have registered interest totaling some $65 million in the venture, the company said.
Knightscope can make its offering thanks to the implementation of last year’s Regulation A of the JOBS Act, which allows startups to raise up to $50 million by offering private stock for sale to the public. Previously, only wealthy investors could make this kind of startup investment.
Despite Knightscope’s claim of massive interest, previous offerings of this kind have had only moderate success. Data from the Securities and Exchange Commission reveals a total of 147 offerings so far that propose to raise around $2.6 billion, with 81 being formally approved to raise $1.5 billion.
Why go this route, then? “Most VCs are not fluent nor have a track record in physical security, law enforcement, robotics and large-scale hardware,” Knightscope Chief Executive Officer William Santana Li said in an email interview with SiliconANGLE. “This is a new financial mechanism to move capital more efficiently between two parties … that prior were really unable to engage until the JOBS Act.”
The company currently offers two versions of its R2-D2-esque security robots, the K5 which weighs in at 300 pounds and stands at five feet tall, and the smaller K3, which stands at four feet tall. The former model is designed to carry out security patrols outside, while the latter is built for patrolling inside buildings. Customers can’t buy the robots either – instead, Knightscope operates a Machine-as-a-Service business model in which it rents out its bots to customers on a pay-per-hour basis. The company said it operates this way so that customers can benefit from ongoing upgrades free of charge, ensuring they always have access to the latest innovations.
Software + hardware + humans
Knightscope says its robots are primarily designed to gather information and prevent possible crimes, rather than actually chase down suspects and apprehend them. Their main task is to patrol parking lots or the inside of facilities looking for anything suspect. Once they find something, they notify a human security officer to investigate. So they’re intended to help rather than replace human officers. “We continue to push a Software + Hardware + Humans approach as the ultimate, most effective combination,” Li said.
He also noted that a prime benefit of the robots is keeping human security officers safer. “We provide our troops, rightly so, all the capabilities you could ever imagine on the battlefield,” Li said. “But for the over 2 million private security guards and law enforcement professionals that get up every morning and are willing to put themselves in harm’s way for us on our own soil, we hand them a radio, a bullet-resistant vest and maybe a stun gun and say ‘good luck.'”
Knightscope doesn’t have any plans to equip its security bots with laser guns just yet – though Li said future versions will be armed with weapons detection technology that’s currently in development, in order to help prevent mass shootings such as the recent shooting at Fort Lauderdale airport. Indeed, Li said major incidents like the Sandy Hook Elementary School shooting were what first inspired him to create his security robots in the first place.
“We are actively working on weapon detection capabilities in addition to bolstering other capabilities that will give security professionals advanced warnings, better situational awareness, and live data feeds for real-time assessments for situations like these in sensitive locations like an airport,” Li said.