Verkada reaches 30,000 customers and 100 Fortune 500 accounts — and is eyeing an IPO

I did. Well, we have our next guest here live in the re in in the not the reream waiting room, the real stream waiting room, the TVP Ultradome waiting room. We have Phillip from Vicata. Welcome to the show.

I want to here. Uh, introduce yourself, but then get ready. Just go hit that gun right now.

Let's do it.

Let's hit that gun right now.

Let's do it.

That you don't know. You don't know anything about him or his company yet,

but you know he's here for a good reason because the company has of course raised money. But please introduce yourself, introduce the company, and then we'll get into the news.

Sure. Yeah. So uh excited to be here. I'm Philip. I'm one of the founders and CEO of a company called Verata.

And Verata is solving a super important uh problem in the world, which is the problem of safety in the physical world. And we solved that problem with AI. We solved that problem with software. And we deliver that through devices like cameras, like door access controllers, alarm systems and uh so on.

Yeah. So I mean Anderol in some ways is physical security for the military and you have flock safety at the municipal level. Are you at the B2B level, the BTOC level? Like who are your customers?

Yeah. So think of uh think of enterprises, think of schools, think of uh government buildings, think of uh anyone and everyone in the world, places you probably interact with every day, airports, hospitals. If you go to the gym, gyms,

airports in the gym, the gym's gonna be in the airport. You're two for one there.

So, you get two for one there. [laughter]

Uh but but let me make it real for you of like an example. So, you know, we do uh like a hundred of the Fortune 500 users today. Uh but to give you a sense

and and and that's in their office buildings, other campuses,

office buildings, campuses, [laughter] we're getting after them. Yeah. So, we'll get them all. But, uh but yeah, to give to put it in perspective, I think, you know, it's sort of like an example makes sense. So just in LA recently we got a customer which is Terowatt, right? They are a commercial vehicle charging station. So they charge the self-driving cars, the Whimos of the world, you name it. Um and their challenge is they've got you know kind of premises outdoors parking lots where all expensive vehicles come in and they need to secure that, right? And they don't want a guard on every parking lot. Uh and so what's their best next alternative? Well, up to this point it was you can put cameras and then you can hire people watching those cameras and they're very expensive. And if you know anything about people, they're really bad at watching video. Oh yeah. People need especially because you could watch 300 hours and there's only 30 seconds actually. Exactly.

And so you take out your phone one time to watch that one Tik Tok and then

it was a really good meme. It was a really good me and you miss and you miss exactly what's going on. You miss the guy jumping the fence. You miss the guy stealing the cable or doing whatever. And so that's what we're able to do in real time. I imagine this product sells itself because if uh if if you don't have security, your sales people can just go straight to the CEO's office. They just break right in. Don't do that.

So, you raised uh new money from Capital G, Google, $5.8 billion valuation.

You are uh it sounds like some some or a good amount of it was used uh was secondary.

Um when did you start the company? Uh I think

what were the first products?

Yeah. What were the first products?

Yeah. Look, so let me just give you like a brief on the business and how it's grown, right? So the business is about 9 years old, almost 10 years old. Uh you know, in its history, we started in 2016.

Sorry, you can't you can't hear that. I just I just overnight success.

This is the overnight success one.

But yeah, it's been 10 years. We're at 30,000 customers globally, 17 offices around the world. Like I said, 100 of the Fortune 500. Uh so that's that's kind of the journey of the business. We started in video security initially. So that was the first idea and then from there we expanded to a platform of physical

and that product video security was that a white labeled video camera and then you were doing the the SAS product the software around it or were you building hardware on day one? How did that all come?

Yeah. So think of it like an end toend solution, right? Like think of it almost like the iPhone of the video security industry. You buy it from us, we guarantee it. It works. You know we do the hardware. We do the software that runs on the hardware. We do the cloud software and we seamlessly integrate it all together and that was the magic that our customers fell in love with from the beginning. That's where we started. So that's 2016 2017 we launched the camera that goes really well. I mean the market you know really loved the product when we launched it

a few years.

Was there any doubt or was it just up and to the right immediately?

Well you know it's it's interesting like there was doubt at the very very beginning right like in 2016 we were starting the company and people said Philip why are you doing hardware? Why not just do software? Just build, you know, just build back then computer vision. It wasn't even AI back then, right?

There were so many hardware failures around that and hardware is hard, right? So I I get like I get why people were skeptical.

But then once we got the product to market, people got it and it just worked well. The customer reception was phenomenal and it was one of those stories where it just took off.

Um and from there, you know, two three years into the business, we realized that the opportunity is much larger than that, right? It's not just video security. It's actually this broader world of physical security. The customer base has a dream of an integrated system that solves broader problems. So we started looking at access control. Think of all the badge readers, how you get into buildings. We started looking at alarms. Massive market. Every building that closes at night has an alarm system. You know, all of those send you false alarms. They've been invented years and years ago. All it takes is a truck drives by, a sensor shakes, and you're getting a call at 2 a.m. What is that about? Right? Police stopped going to alarms because they get so many false alarms. So we said, "Let's solve that." It's the same thing with car alarms on the street. You walk cars going off. No one even just psychologically in our society really stops everything if they hear a car alarm going out. If you're at a restaurant, you're not going to be like, I got to go check on that. Something serious is happening. You're like, yeah, car.

So, you know, so that's where it evolved to. We, you know, we now have the full sweet platform. Uh I'm super stoked. Like one of the cool things is, you know, we it's only been like four years, 5 years really since we expanded beyond physical security. 77% of my core customers now use two or more of our products, right? 50% use three or more and so on and so forth. So this platform story is really resonating. It's playing out really nicely.

Will we see robots integrated into your platform? I've had this uh thesis that uh not not the most original thought but uh this idea that like security guards are primarily there to just be a human that is like at least a human-shaped thing that is on the premises providing this sort of deterrent effect. And I could see humanoid robots getting traction faster and just standing in places that need to be secured and being like having a physical presence

sort of looking intimidating.

Looking intimidating before they're really good at like actually adding value in my home. Yeah. And I don't know. I'm sure you've like

how do you think about human [clears throat]

I mean look I think you might have some of that. I mean I don't know how close that future is right but um I think you know fundamentally if you think about physical security it is a human problem and I think humans are not going away from the problem of solving physical security for other humans. So yes we might have robots yes we might have sensors but ultimately at the end of the day I think you know security personnel is going to exist and it's going to address those human problems. Yeah,

it's just the technologies that we're building, technologies like humanoid robots will make that security personal have a superpower in a way, right? It'll make them more aware. It'll make them do more useful things. It will save them hours of time watching mindless video or missing things and focus them on actually resolving the emergency at hand.

Yeah, it's interesting thinking about the the the role of the human security guard. Like you can almost think about it as like a bundle of tasks or or or or jobs to be done. One is basically a camera that you can move. You know, a security guard can go look behind that gong and see if there's something going on there. But at the same time, like you can just put a lot of cameras and get coverage. Uh but a security guard can also go and ask for more context. Say, "Oh, hey, are you supposed to be here? Let's have a conversation about this." And that's something that we're not quite there with the humanoid robot. Um, and so are there any other formats that you're excited about like the the four-w wheeled robots or the drones? I mean, I saw doesn't Amazon sell a a drone camera inside your house, which I thought was very odd. I don't know if that product's doing well, but uh, how do you think about the other form factors that might be a little bit more economical, a little bit more tractable before we get to the full humanoid? I think look the reality of it is is I think you know the cost of sensors and the cost of being able to be aware of what's going on is just going down as it's not a new idea right we've had sensors in the world you know for decades really we've we've had it right uh and so you know my sense is the ease of deployment of cameras the form factors of cameras it's going to get easier it's going to get simpler it's going to be easier for the customer to use uh and it will take all sorts of form factors right it might be a camera that's drilled into the ceiling it might be a camera that's running on solar power. It might be a camera that's on a drone. Uh, and by the way, it might not just be cameras, right? It might be radar. It might be microphone. It might be other sensors. I think the challenge becomes

what do you do with that information and how do you effectively process that information ideally in real time so that you can mitigate the situations, right? Like you don't want to

you don't want to use it after the fact. Yeah.

This happens. So, like we have great footage of you getting robbed. It's amazing. You guys have do do you work with museums?

Yeah, so we we work with, you know, all forms of customers all around the world. I mean, you bring up museums, which pops to my mind immediately to Liz.

Yeah. What happened there?

Which is crazy, right? I mean, in broad daylight, you know, people came with a uh, you know, with a lift and and got in there. Uh, but it's actually a very difficult problem to solve, right? Because if you think about it, um, they have to secure the perimeter of that building. And if you've ever been to that building, it's a massive structure. If you literally had humans or even robots roaming around that building, that would be a lot of humans and a lot of robots, right? And so, uh, one of the things we're excited about is, you know, camera technology paired with AI is now getting to the point where monitoring for things like that, uh, is is more reliable than humans doing it. Uh, it's faster than human humans doing it. Uh and so in a situation like that we could totally you know alert the physical security response team like hey something suspicious is going on right here right and we could do that in real time with very high accuracy uh without missing events right so those type of situations we think we can uh we can solve

yeah help me walk through how AI actually impacts like decision making on top of a sensor platform because I imagine uh you know the the first version was probably just some business logic

if movement send push notification or email or something. Uh then you get to some sort of heruristic based, you know, linear regression or something. But now you actually could take a video and upload it to an LLM and ask it, does this look suspicious? And it would just tell you like, yeah, that does look suspicious or not. Uh are we there yet? Are we using generative AI? Are we using transformer-based models for this stuff? Like what's the state-of-the-art? Yeah, look, so this the state-of-the-art frankly is it's amazing and the amount of progress in the market in the last two years has been just phenomenal, right? Like if you take a video clip and I don't know take it and upload it into Gemini, Gemini will know everything that happened in that video clip and it just blows your mind, right? Like 5 years ago that was science fiction. Today that's a reality. Uh so you know we rely on some of that, right? uh and and and I think the way we think about that is

you know we uh you know we try to understand what's going on on in all of these scenes in real time with particular sensitivity to things that might be security incident related right and so if you think about that you know kind of premise like what is common to all security incidents or most of them while they mostly involve humans they mostly involve vehicles

there's at least some motion in the frame

there's some motion going on that was the basis right and so 10 years ago

you don't need to just be uploading you know Oh, there's 10 seconds of video where nothing happens. Upload it to Gemini. Pay the token. No way.

Yeah. Yeah. Exact. Well, and so you're on to something, right? So, so, so, so I think that's that's kind of the crux of it, right? Which is like

processing all of the video from all sensors and all cameras today is still prohibitively expensive. And so, you can think of almost as like a layered filtering approach, right? We use different heristics and different mechanisms. Some on the edge on the processor that's on the camera, some then in the cloud, and some with like heavier models that we offload to. But with that full stack, we're able to, you know, discern things that really matter. And that might be something like, you know, a person climbing a fence, right? Or a person carrying an object or an object left behind or, you know, soon enough a person pulling a weapon.

Yeah. Yeah. Interesting. Uh, is there a demand for uh sort of on premise inference for any security stuff like this? Do you see do you feel

Yeah. I think look the as I said I mean like the whole thing is you know how do you deliver this inference at scale at a reasonable cost that makes sense to you know kind of the broad base of customers and I think the only way to do that frankly is to do some of that inference um on premise the way we think about that is we do that on the edge on our device uh the two reasons for it one is you know purely the inference cost the second is is actually if you think about it most of the world is actually not connected with fast enough bandwidth to push all the highquality high resolution data in real time to the cloud to do the processing in the cloud. And so that's yet another reason that we you know take this like you know kind of hybrid cloud approach as we call it where we do some processing on the edge and that's been phenomenal for our devices.

How do you think about pricing for nonprofits for more sympathetic audiences? When I think about like security for, you know, a big tech company, I'm like, they can pay the full price. But for a local school who might be worried about an intruder or some sort of, you know, uh uh disastrous situation that could happen at at a public school, uh you know, you don't want them it would just feel so bad if it was like they they almost said yes to the contract, but it was just out of reach. How do you think about making sure that you're delivering the product?

Yeah. So, look, we try to be flexible and understand our clients and their needs. in some product categories. We actually even have, you know, kind of special pricing for that, you know, for that. But, um, you bring up a good point, right? Schools are a big customer segment for us, particularly in the US, K12 education. Uh, and, you know, some of it stems from, you know, kind of the the very scary security issues. But what we're finding which is really interesting is you know the school might invest in our system to sort of you know prepare for these dramatic scenarios but then they're finding so many more daily uses okay because we had made the software intuitive right so we're solving problems like kids vaping on campus or kids bullying each other right or you know I love the cases where like the principal sends us some video of like you know these two kids got into a into a fight and I was able to pull it up on my phone and and figure it out. Oh, and by the way, I could like on my phone, you know, quickly obscure the faces of other kids in the scene and share the two kids that were in trouble with the parents, right? So, things like that are, you know, in my mind, it's you're building it out because you're, you know, you're going after the very scary problem, but there are so many more positive externalities.

It's a completely different lifestyle. You used to be able to

You used to be able to say,

you used to be able to throw down and get away with it.

Well, let's be real. Kids kids are creative, right? So, they they will do they will do fun stuff no matter what. Yeah, that's amazing.

Uh what's what's next? You'll get the rest of the Fortune 500, the other 400. Uh are you going to go public at some point? You want to stay private forever?

Yeah, look, I mean, I think we're a business that is definitely going to be a public company. Uh if you think about it, we've got a market that supports it. Uh you know, $55 billion a year in spend in the categories that we operate in today. Uh that's six product categories. We're chasing other adjacencies. You know, massive customer adoption. Our customers are buying more from us every year. So a customer who buys Vicata 12 months later they double their spend. You know uh 24 months later they triple and so on and so forth. Uh so it's you know it's the kind of business that has the profile to be a public company. We're not ready to make that announcement today yet. But stay tuned and yeah we'll keep you posted. Yeah.

What about uh like the supply chain? I mean if you're building physical hardware I imagine that the tariff like liberation day was probably stressful to you. How are you thinking about um what and also security is important, right? Like this is like potentially critical depending on who you're selling to. Uh how do you think about building out your supply chain for manufacturing?

Yeah, look. So, uh yeah, lots of change in geopolitics. Obviously, we have a you know, kind of Asia heavy supply chain. We started in Taiwan. We diversified away from Taiwan. So, we've got, you know, multiple regions in Asia where we manufacture uh you know, our products. And there's also just different pieces like you know a plastic housing coming from China is different than a semiconductor coming from China right.

Yeah. Yeah. Exactly. And then you know then the chips and the RAM and you know all the different components. But look I would say over the last couple of years we've diversified our supply chain uh you know quite a bit. Uh so we feel you know like we're in a good spot uh as it comes to that.

That's cool. Uh any is there anything that you plan on like reshoring or you're thinking about or looking about uh making in America? Is that an interesting opportunity?

You know, not not at the moment. Uh yeah, not at the moment.

Yeah.

Uh maybe maybe in the future. I don't know. Maybe. Uh anyway, thank you. Do you have anything else, Jordy? Great.

This is fantastic. Thank you so much. It was fun to be here.

This was great.

We need uh we need rata.

We do. We do.

Let's get Let's get you uh