As the security market moves to the cloud, Solink is looking to scale.
Ottawa-based Solink has completed a $60 million Series C funding round to expand its video surveillance software globally.
In an interview with BetaKit, Solink co-founder and CEO Michael Matta said he believes now is the time for Solink to invest in growth, citing growing demand for the Solinks platform amid the economic downturn and the broad shift in the video surveillance market from on-premises technology to cloud solutions.
After researching market conditions and seeing a lot of inbound interest from prospective investors, Solink co-founder and CEO Michael Matta saw an opportunity to really expand the company’s business.
Ultimately, this is a changing market, Matta said. I believe that the winner that exists today in the security space will not be the same five years from now and we have a chance to establish ourselves as a leader.
Solinks’ all-stock Series C round was led by new investor Goldman Sachs Asset Managements Growth Equity Business, with continued participation from existing Solink backers OMERS Ventures and BDC Capitals Information Technology Venture Fund. The funding, which closed earlier this month, brings Solinks’ total funding to $90 million.
In commercial environments, security cameras are ubiquitous, but many are not connected to the cloud and are only available onsite. OMERS Ventures partner Laura Lenz told BetaKit in an interview that these aren’t smart, intelligent cameras that can provide insight and analytics to business owners.
Enter Solink to sell subscription-based software. According to Lenz, it does so in a seamless and easy-to-use way. The startup platform will allow existing security cameras to be accessed remotely via the cloud, combining footage with his POS data to be searchable by event. Solinks camera-agnostic software provides businesses with secure real-time access to video and leverages artificial intelligence (AI) to quickly identify trends and alert on suspicious activity such as theft to improve operations.
The company serves a wide range of industries including restaurants and restaurants. Retail company. financial, educational and medical institutions. Hospitality, manufacturing, logistics and property management companies. Solink serves his 18,000 customer locations in 15 countries, and his customer list includes Tim Hortons, The Container Store and PGA Tour Superstore. When Solink closed his OMERS Ventures-led Series B round in 2020, the company was managing about 50,000 cameras. Currently, that number is around 300,000.
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Solinx’s latest round was a very clean deal on clean terms, Matta said. The CEO declined to disclose Solynx’s valuation as part of the latest round of funding, but claimed the valuation was higher than Solynx’s Series B round. Matta confirmed that the Series C round also included some secondary capital, but declined to disclose the amount, only noting that some early Solink investors had taken chips off the table but remain Solink shareholders.
Cloud technology has become an important factor in many industries and verticals, Matta argued, but the security space is still in its early stages as only a fraction of today’s security offerings are cloud-based. Traditional on-premises video surveillance technology providers, who sell hardware and software to businesses as a one-time service, now account for about 95% of the market, he said.
However, research shows that there is a growing demand for cloud-based solutions like Solink. According to a recent report from market research firm Novaira Insights, global video surveillance overall is growing, with the cloud-based video surveillance as a service (VSaaS) segment in particular being one of the fastest growing categories in the market. Novaira reports that its installed base of cloud-connected cameras grew by about 80% last year as VSaaS revenues took a larger share of the overall market from on-premises providers.
Novaira predicts that the number of cloud-connected cameras will continue to grow at an average annual rate of more than 80% over the next few years. Matta declined to disclose Solynx’s earnings, but the CEO argued that the company’s growth is roughly on track with the pace of the VSaaS market.
Physical security is critical to managing the operations and profitability of most businesses and small businesses around the world, said Mike Riley, vice president of Goldman’s Growth Equities business, in a statement. After digging deep into physical security and his VSaaS space, our team has identified Solink as an emerging leader in a market that is rapidly migrating to the cloud and modern solutions.
Goldman’s investments are made through its recently launched $5.2 billion Growth Equity Fund, which purchases minority stakes in high-growth companies with strong global market positions through an average investment of $50 million. Riley, who is on the Solinx board as part of the round, declined to speak to Betakit about the matter, noting that Goldman Sachs does not allow media interviews about its investments.
Over the past few years, Solink has expanded into new industries and geographies and launched new products.
In the midst of the economic downturn, Solink sees increased demand for its technology, Matta argues. Markets are typically inversely correlated with risk, security and crime in general, which has led to a significant increase in demand for our products, enabling businesses to optimize profitability and minimize losses and shrinkage, he added.
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Speaking about the loss prevention component of Solinks’ value proposition, Lenz described the Solinks platform as a must-have solution in a downturn environment.
Solink has avoided raising money during the height of the venture capital (VC) market in 2021 and 2022. We have always been very disciplined about how we operate and scale our business, Matta says. We’ve always had very high growth rates and we’ve been able to manage that on the balance sheet.
This approach has helped Solink avoid layoffs and complete a large funding round, while many other Canadian tech startups have struggled to raise funds or layoffs.This is a very consistent and predictable revenue increase [company] It was capital efficient and [and] Lentz said he knows how to build a successful business whether he receives venture capital funding or not.
This is a very consistent and predictable revenue increase [company] It was capital efficient and [and] I know how to build a successful business, whether or not I receive VC funding. – Laura Lenz, OMERS
Solink has not been actively raising capital and did not need more capital at this time, Matta said. But Matta said after studying market conditions and seeing a lot of inbound interest from prospective investors, he realized Solink really had an opportunity to scale.
Solinx’s plans on this front include investing in product development and go-to-market efforts, including AI-native products, as it seeks to add more customers in new and existing verticals and geographies while relying on Goldman’s vast network. To kick things off, Solink recently opened an office in the UK.
Matta expects vision technology to play a bigger role in the physical world in the future. Longer term, he sees room for Solink to become the core vision platform that other vendors can build products on, which he says is his second priority.
While Solink aims to supplant traditional providers while fending off cloud-based competitors and new entrants alike, Solinks’ CEO believes that both companies’ agile, cloud-native approaches and focus on customer service will enable the company to become a global leader in the increasingly cloud-based security and video surveillance space.
Feature image courtesy of Solink.
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