In this Research Note, we examine Irisity AB, a Swedish provider of AI-powered video analytics solutions. This analysis is based on their 2021 Annual Report, investor presentations, acquisitions and growth strategy.
Irisity AB is a public company listed on Nasdaq First North Growth Market. Founded in 2006, the company serves customers in more than 90 countries with headquarters in Gothenburg, Sweden and offices in Israel, USA, UAE, Mexico, Singapore and Denmark. The firm, employing around 100 staff, operates through a network of resellers, partners, security companies, and camera manufacturers globally.
The Group’s 2021 consolidated net sales amounted to MSEK 93.1 (USD 9.1M), a net increase in revenue of 110% with an underlying organic growth of 41%, an EBITDA result that turned positive after an increase of 200%, a gross margin that strengthened by 20% and a Monthly Recurring Revenue that increased from MSEK 1.5 to 6.6.
In September 2021, Irisity announced the acquisition of Agent Video Intelligence (Agent Vi), an Israeli-based provider of AI-powered open architecture video analytics solutions for USD 67.5M. This acquisition was consolidated from mid-October. Agent Vi’s total 2020 revenue was USD 6.1M, with EBITDA USD -0,4M and net profit USD 0,3M. The acquisition is expected to contribute with revenue exceeding USD 12M for the coming twelve months and is expected to contribute to positive cash flow on an annual basis in 2021.
Agent Vi’s offering includes software products for automatic analysis of live or recorded surveillance video, allowing real-time detection of events of interest, and quick extraction of events and data from recorded video. Their solutions can be deployed on-premise on the customer's infrastructure, or delivered as a cloud-based SaaS, and are fully integrated with a variety of third-party cameras, encoders, video management systems and alarm automation software.
Being of similar size, with complementary customer sets and geographical coverage, and both companies having an ambitious growth agenda, the merger is expected to unleash synergy effects within product development, technology, marketing, and sales. Their goal is to become the leading global AI video analytics provider, offering a broad range of software and Software as a Service (SaaS) solutions for automatic analysis of surveillance footage and real-time video streams.
“This acquisition is in line with our strategy and ambition to build a market leader. We believe both companies complement each other in all important dimensions, management, product, and market as well as technology. Together we have an even stronger position serving an accelerating international demand for high precision analytics, continuously building shareholder value.”, says Lennart Svantesson, Irisity Chairman.
The acquisition of Agent Vi has enabled a strong sales force to be established on all major continents. The integration of the Swedish and Israeli development teams of over 50 developers is expected to be completed by the summer of 2022.
Irisity’s global expansion strategy was reinforced with the announcement that the company will make its school safety solution, Iris School Guard available on the Google Cloud Marketplace, as from 1st August 2022. The company will initially target more than 130,000 public and private K-12 schools in the U.S. Many schools already have cameras but most lack advanced analytics and the ease of use applications to make them effective safety and security tools.
In June 2022, Irisity strengthened its global channel network through a new Partner Program (IPP) for distributors, system integrators, and resellers which offers online training and certification programs, enhanced technical and sales support, benefits on joint marketing collaborations and exclusive discounts.
In March 2022, Irisity announced it had developed an embedded version of IRIS integrated into the latest generation of MOBOTIX cameras via the open MOBOTIX 7 platform, enabling state-of-the-art video analytics directly in intelligent camera systems. In 2021, Irisity developed an embedded version of IRIS to be integrated into Axis TPU cameras.
“We basically want to have partnerships with all entities that have access to high amounts of camera streams, since this is where we apply our algorithms. Many camera manufacturers, as an example, have realized that their products are more attractive together with AI technology” said Marcus Bäcklund, Irisity CEO.
Irisity has undertaken a transformational acquisition to differentiate their video surveillance offerings. Time will tell whether the integration of the two companies can yield the predicted benefits and position the company as a global leader in the fragmented video analytics market.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.