In this Research Note, we examine Gorilla Technology Group, the Taiwanese video surveillance business, based on their 2022 financial results, Annual Report, investor presentations and strategic pivot to Security Convergence. This is an update on our previous article, SPACS: The 800-pound Gorilla in the PropTech Room.

The Gorilla Technology IPO, was completed in July 2022, through a SPAC merger with dedicated “blank check company” Global SPAC Partners Co. Gorilla is best known for its edge AI technology, the company holds 31 patents related to solutions available across hardware platforms, AI models, appliances, and software services. Sales are dominated by a range of video-centric and content management solutions for smart cities, smart retail, and enterprise security. Gorilla also offers cybersecurity through their Security Convergence Platform aimed at government institutions, telecom companies and private enterprises seeking network surveillance.

Headquartered in London U.K., Gorilla’s status is best reflected by its list of technology partners, which include big hitters like Softbank, Intel, and Dell, among others, and by its broad client base, which includes the likes of ExxonMobil, Danone, AIS, Auresys, & MasterCard. Gorilla also has a history of funding from reputable international investors, including SBI Group, Acer, Telstra Ventures, Asteria, and tech partner Dell. 

Gorilla reported its 2022 results on 4^th April 2023 with a revenue decline to $22.4 million versus $42.2 million in 2021, and a strategic pivot to Security Convergence as a complement to its Video Analytics business. This 47% revenue decline reflects the shift in emphasis to security convergence announced to counteract the poor results, due to the exiting of many unprofitable or marginally profitable customer accounts. Commenting on results, Gorilla Chief Financial Officer Daphne Huang noted:

Solid growth in Security Convergence is an early indicator of the wisdom of our product pivot, and the MENA win shows that this region can drive explosive growth in the years ahead. The revenue decline in 2022 was challenging but necessary to instil sound operational and financial discipline and reset our customer and project focus.

The security convergence offering now accounts for the majority of sales, with 56.7% of total 2022 revenues, while video IoT solutions accounted for 43.3% of the total.

As part of their revised strategy, the company won a significant Smart City cybersecurity implementation project in MENA in December 2022. A government agency of a Middle Eastern country developing Smart Cities has communicated its intent to engage Gorilla to implement an expansive cybersecurity solution for one or more cities under development. The aggregate project will stretch over several years, with first phase revenue of $100 million or more to be completed in twelve months. The second phase is likely to start later this year and should be larger in project scope. They anticipate Phase II revenue to be potentially up to twice that of Phase I.

Gorilla Video Surveillance Acquisitions

In November 2022, the company augmented its edge AI solutions with the acquisition of the technology platform of SeeQuestor Ltd, a UK-based provider of video analytics solutions.  Formed in 2014 as a provider of automated video post-event analysis supporting domestic police investigations, SeeQuestor’s real-time video surveillance analytics product enables law enforcement agencies and security companies to automatically monitor thousands of cameras in one unified platform.

Their solution helps identify faces, bodies, threats, objects and vehicles and sends real-time alerts enabling security and surveillance companies to reduce their turnaround time and provide a safer environment. SeeQuestor’s client base creates an immediate gateway to new markets in Europe, the Middle East, and North America, which will be crucial to Gorilla’s global expansion efforts.

Gorilla continued on its acquisition trail, with the announcement in April 2023, of its intention to acquire Bacom Internetwork, a Thailand-based systems integrator and provider of Smart Cities solutions. Although the transaction has not yet been completed, the acquisition will help Gorilla expand its presence in Asia. 

Since 2011, Bacom Internetwork has been a distributor and systems integrator of intelligent security technologies such as video surveillance in Thailand. Bacom is a provider of Smart City Infrastructure solutions, including Apismart, a Smart Building solution it developed that improves living standards through Smart Security and Smart Ecosystems.

“We are witnessing the Asia phenomenon of Smart City developments, which is unique and quickly urbanizing in the global economy. Combining Bacom's impressive team and product portfolio with Gorilla will help create a strong Smart City solutions platform, capable of delivering economic, environmental, and social benefits,” said Lawrence Ng, Head of Asia for Gorilla.

The company over-promised in its financial forecasts outlined in its SPAC investor presentation in June 2022.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.