We financed Knightscope in an unconventional manner over the years and have closed over $40 million in equity financing since our inception in April 2013. Between the family offices, private investors, accelerators and 4 major corporations, we are now backed by well over 10,000 investors. Some names that may be familiar include Konica Minolta, NTT DOCOMO, Flex, NetPosa, Plug and Play Ventures, F50, Bright Success Capital and Proud Ventures.
Since we took this alternative path, we are often asked who has funded our innovations in advanced physical security technologies. Well, following you will find a high-level cross section of some of our awesome investors who have bet on us, stuck with us, invested multiple times, opened doors for us, helped us with clients, recruits and, of course, brought us new investors! We’ve also tried to include some interesting, behind-the-scenes nuggets for you, too.
Some of our investors are just plain fascinated with technology. Let’s face it, robots tend to bring the kid out of almost everyone, and artificial Intelligence has had a similar effect. Autonomous technology has even managed to motivate an entire industry to deliver the magic of self-driving cars on public roadways. Combine the three and, with a little help from Hollywood, you have an advanced technology that is incredibly interesting and at times even a bit controversial – fully autonomous security robots. But yet we still find ourselves amazed at the volume of robot selfies taken across the country every day!
Sadly, believe it or not, there is still talk of “the robots coming to take our jobs, destroy our lives, or somehow kill us all.” This is just not reasonable, primarily for one particular reason: lack of risk capital. You may know that over $100 billion is invested in startups annually – but shockingly, less than 1% goes into robotic startups. The reason Google, Amazon, Facebook, etc., exist is because they had the advantage of being built on the foundation of multi-decade significant investments in the underlying technology and the numerous startups attempts themselves (i.e., Google was far from the first search engine). That is not true in the robotics space or hardware in general – and, therefore, it is unlikely that the magic on the movie screen becomes real life anytime soon.
It is also a bit concerning that over $80 billion has been invested in self-driving technology over the last few years, yet no one has shipped a real, commercially viable product at scale. It’s looking increasingly relevant that Knightscope’s “crawl, walk, run” approach to commercializing autonomous technology may have been a solid decision as we believe, to our knowledge, that we are the only company in the world operating fully autonomous 24/7/365 across an entire nation without human intervention with real clients generating real revenue in real world conditions.
A significant number of our investors are fed up with ongoing violence across our country and want to help do something about it – by building new technologies and capabilities. Most of our society doesn’t realize that it is highly unlikely that the local/state/federal authorities are going to be able to address the $1 trillion negative impact of crime annually on the U.S. primarily due to a significant structural flaw:
The U.S. Department of Defense (DoD) has a $700+ billion annual budget, there is one person in charge (the Secretary of Defense), and a massive industrial complex to build almost any level of capability a soldier might need in a theater of war. The capabilities of a Lockheed Martin, Raytheon, Boeing, General Dynamics, and Northrop Grumman are tremendous.
Unfortunately, that doesn’t exist on the home front. The U.S. Department of Justice (DoJ) and the U.S. Department of Homeland Security (DHS) have effectively no federal jurisdiction over the 19,000+ law enforcement agencies and 8,000+ private security firms. There is literally no one single person tasked with that responsibility, no risk capital, no innovation, no processes, which is why as we approach the year 2020, we have security guards sitting in a parking lot at 3am with a #2 pencil and a notepad.
We would not dare treat U.S. troops in this manner. Yet, every day, over 2 million law enforcement and security professionals get up and go to work willing to take a bullet for you and your family – and the level of technology we provide to them as a country is beneath the dignity of our Nation. We must do better.
CORPORATE VENTURE CAPITAL
As Knightscope looks over a multi-decade planning horizon, we believe there is an opportunity to build a $30 billion company analogous to a defense contractor, but instead focused inward on operations on our own soil. To that end, we’ve sought out long-term, balance sheet driven, or otherwise evergreen capital so that we can remain focused on the mission and not get distracted by short-term shenanigans associated with short-term capital.
With over 25% of venture capital now being driven off of a balance sheet from a major corporation, it is a naturally fitting source for us. Some of these major corporations are doing reconnaissance, avoiding competitive threats, seeking innovations, building to buy companies or, in some cases, literally outsourcing R&D (Research & Development) to young startups – a unique source of capital that has come into fundraising circles in earnest over the last decade or so.
SINGLE FAMILY OFFICES
Some LPs (Limited Partners) are tired of paying venture firms the standard “2% & 20%” and getting locked up for 7 to 12 year in funds with underperforming money managers investing in opaque startups with little transparency. A trend is rapidly developing among these family offices whereby they are accelerating their respective efforts in direct investments as friendly sources of passive capital to entrepreneurs – and skipping the middle man.
A number of our investors are simply driven by a ‘buy low, sell high’ approach. They take a strong look when there is an opportunity to buy into a promising, private startup before a possible public listing. They look at the market, the technology and the team and place a calculated risk that, in our case, the ‘market for crime’ will likely continue; self-driving technology, robotics and AI are the future; and the team has a track record of delivering despite the headwinds associated with commercializing bleeding edge new techno
And since we are often asked, here are the historical share prices over the last 6 years:
Historical Share Price (year priced)
2013 $0.3317 Seed Round (oversubscribed) – $4 million cap on convertible note
2014 $0.8932 Series A (oversubscribed) – $15 million pre-money valuation
2015 $2.0401 Series B – $45 million pre-money valuation
2016 $3.0000 Series m, m-1, m-2 (oversubscribed) – $80 million pre-money valuation
2017 $3.5000 Series m-3 (oversubscribed) – $123 million pre-money valuation
Overall, we have folks from all walks of life invested in Knightscope – engineers, law enforcement, military, real estate developers, marketers, attorneys, bankers, bus drivers, physicians, CEOs, chief security officers, founders, and retirees. We are forever grateful for their diversity and their support – because without them we couldn’t do what we do!
Knightscope has a secured an extremely diverse and large investor base which may likely be of benefit to the Company, when and if, there is a successful public listing. If you’d like to learn more in how to buy shares in our Reg A+ IPO click here. We can accept investors in the U.S. as well as internationally and you may invest from $1,000 minimum to a $10 million maximum completely online.
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