Interview with Marcus Bäcklund, CEO
10th March 2022
Marcus Bäcklund, Irisity CEO, participates in an investor relations-focused interview by Erik Penser Bank. Marcus goes into detail regarding the product, company, recent merger, and current partner collaborations.
– Could you please describe your product quickly?
We develop deep learning-based algorithms that understand pixel patterns in camera streams. Since a camera stream contains millions of pixels this is quite demanding and therefore requires machine learning. The algorithms can detect as an example a person falling.
– You are quite skilled in detecting activity on long-range, right?
Yes, since our system only requires 15 pixels to make a detection we are able to cover really vast distances. Should more pixels be needed the range would be shorter.
– This also then means that a camera with lower quality can utilize the system without problems?
Exactly. It is even possible to use on VGA cameras and really low-resolution cameras.
– What type of cost savings does this result in for your customers?
It is definitely considerable cost savings since without technology like ours detections must be made manually. Guards patrolling or operators watching camera streams is the alternative. Humans are not made to have constant attention on such small targets with 100% precision, 24/7. So by installing our product operators can instead focus on handling the incoming alarms that are generated. An alarm clip of about 8 seconds is sent to the operator, who can instantly take appropriate action. Efficiency, therefore, increases drastically. We have customer cases where cost savings have amounted up to 50% after the installation of our software. I also want to highlight that apart from cost savings, there are also large customer utility savings.
– So to summarize; by installing the product you can both replace a patrolling guard, streamline the video surveillance, and also act preventively due to the detection of behavior?
Exactly. We usually say that we fill two primary customer needs. One is by protecting assets from varying types of crimes by detecting intrusions, and the other is by protecting people from getting hurt, having accidents, or being the subject of violence.
– How have you managed to achieve and maintain such high performance?
We have managed to build a team of over 50 developers in both Sweden and Israel, who are all very technically competent. This is not an easy feat in today’s market, since the competition over skilled developers is very high. We will continue to recruit to create a strong, high-performing team. Today we are at the forefront of technical development and precision in our industry, with a highly advanced neural network, all thanks to our skilled team.
– You have made an extraordinarily exciting journey the last half-year, from being a purely Swedish company, based in Gothenburg to a global entity by acquiring AgentVi. Can you explain more about AgentVi and what the acquisition has meant to Irisity?
We are very happy with this transformative acquisition! Every organization that takes on the task of obtaining another company is looking to create a synergy effect, meaning 1 + 1 equals more than 2. But the even larger perspective of this is to be able to take a completely new position in the market. This is something which we will do and already have started to do. The merger has given us renewed strength, added executive power within sales, development, and marketing, combined products, as well as stronger bonds with our existing partners. We have also added a considerable amount of integrators and distributors to our network.
– How do Irisity’s products combine with AgentVi’s products?
Our products fit very well together. At Irisity we have been concentrating on creating highly specialized algorithms, such as fall detection, rail trespassing, and violent behavior. AgentVi has instead been putting most of their efforts into creating a complete, stable, and well functioning platform containing forensic capabilities and statistics.
– OK. Continuing into partner collaborations. Could you explain your strategies around this?
Yes of course. We value our partner collaborations very highly, and look to continually establish new partnerships within all segments; security companies, video management system providers, integrators, and camera manufacturers. 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. Customers want to buy a smart camera that comes with the manufacturers partnering with a company like Irisity. Then we can add our software straight into the camera. Previously cameras have not been powerful enough regarding processing power and graphical capabilities, but are now starting to become powerful enough. Two examples of camera manufacturers that think like this is Axis Communications and Mobotix, with which we both collaborate.
– So to explain, camera manufacturers make the hardware and you produce the software/apps that is run within the camera?
Yes, in this day and age hardware needs to be sold together with software to be competitive. Just like a mobile phone requires apps to be functional to the purpose which we want to put it today.
– Irisity is probably the fastest growing software company at the Stockholm stock exchange at the moment. Can we talk a little bit about your driving forces within this strong growth journey that you are on?
I think it is the partnership model that has been a strong driving force for this. It has taken a long time to establish these global relationships as these companies are generally very large with slower technical progress due to their massiveness. New software is of course never going to be installed on 100.000 security assets at once, but starting small and then increased. I am very pleased with the work that has been done, as we have now created a strong ground to stand upon with big potential. We have only skimmed the surface with our partners and will in time be able to scale together with them.
A common mistake in fast-growing venture companies is to run too fast on all opportunities and forget to take care of existing customers. It is important to not get tempted to grow faster than one can deliver quality and support to customers.
For us, it is crucial that we continuously deliver high quality. In this sector, the lifetimes of systems are generally very long. One does not simply exchange a security system lightly. This long lifetime principle, together with a low churn rate on a recurring revenue model equals good prospects for us as a company from a financial standpoint.
– What does the process look like when selling to the enterprise segment?
We reach the enterprise segment both through partners and by direct sales. A partner will connect us to one of their customers and we will make business jointly. They do this to deliver added value to their customers and also to sell more of their own products or services. If we connect with partners directly it is often through tenders within the public sector.
– Last week you announced a new partnership with Immix. Can you explain what this entails?
Immix is a world leader within alarm handling. Their software enables customers to connect to any type of alarm device. You see, most cameras have a rudimental, non-AI-based, built-in analysis that can send alarms. But of course, how they do this varies a lot between brands and models. Immix is able to integrate with all types of alarm flows, centralize it and send to an alarm central. However, since these alarms is often of a very low-quality efficiency suffer due to heavy amounts of false alarms. In this collaboration, we connect IRIS to Immix, where all alarms from Immix is sent up to the cloud to be filtered by our AI Alarm Filtering and then sent back to Immix to be delivered to the alarm handling customer. This could be as low as only 1% of the original amount of alarms, increasing the efficiency of the alarm central drastically. Since Immix is a world leader in this segment I believe there is big potential in our new collaboration.
– Finally, what do you think is the #1 key to continued growth going forward for Irisity?
We will definitely continue with our current partner strategy. There are many additional partners we would like to work with. However, as mentioned before we should not do this faster than we can handle, to make sure we take care of our current partners and customers well. We will also need to continue to build our execution capacity. We have taken a big leap forward with the acquisition of AgentVi but will continue to recruit and probably double our sales force. Today we have physical presence in 7 countries, but need to expand this further. Preferably we would like to double our sales force during the year from 15 to 30 persons, as well as further recruit talent within R&D.