San Francisco-based video monitoring hardware and software startup Dropcam today announced the close of a new $30 million Series C funding round, led by Institutional Venture Partners (IVP), and with participation by new investor Kleiner Perkins Caufield & Byers and existing backers Accel Partners and Menlo Ventures. I spoke to Dropcam CEO Greg Duffy about the funding, which, by his own admission, the company wasn’t in a position to really need. It’s about staying two steps ahead of the game, is what he essentially told me.
Dropcam has raised a total of $47.8 million for its connected home monitoring solution, which pairs signature Dropcam HD hardware with a web-based platform for remotely monitoring, recording and playback of live video feeds. It’s ideal for a home or office security solution, with relatively inexpensive setup costs and extensibility, and features like off-site storage that get around limitations with locally-managed installations.
I asked Duffy why raise if Dropcam didn’t need the cash injection, and he said that in part it’s because the funding will help the four-year old company accomplish a lot of its goals for 2014 by the end of this year. It’s about anticipating the market and making sure that Dropcam insures itself against the kind of disruption it has itself accomplished in its chosen market.
“We had actually a ton of inbound interest on this round, and when this started happening I kind of said ‘What would be the amount that I would raise if I were competing against a radical, kind of Dropcam-like competitor? How could I use additional capital to beat them?” he said. “I used this from talking to friend of mine who are also running highly successful companies […] like Dropbox, for instance, they’re competing against a lot of great companies right now but back when they were going through periods of insane growth that wasn’t the case, and they had to imagine how best to compete with a theoretical Dropbox competitor.”
For Dropcam, that means investing heavily in product pipeline, and one of its key areas of its investment is in computer vision. This is about making the entire platform much more capable of taking advantage of the data it collects, according to Duffy.
“One of the things that we decided to invest a lot in, which has been a big project for us, is the computer vision side of things,” he said. “A lot of these guys [potential Dropcam competitors] are really focused on the hardware, and are offering basically just a camera you can access with your iPhone. You certainly can access Dropcam with your iPhone, but that’s about where the similarities end. We have started a computer vision team here, and since we take in more video than YouTube, we decided it would be a good way to figure out how to use that data to get better video analysis for users.”
Dropcam has been working on their computer vision system for just about a year now, and they plan to start releasing features around it and hiring more engineers to develop on top of it, and they can do both much sooner now than if they’d not taken more money. These are designed to leverage data gathered from Dropcam’s network, while preserving user anonymity and privacy, Duffy said.