Remember when security cameras were basically just expensive VHS recorders that collected dust in a back room until something bad happened?
Yeah, those days feel prehistoric now.
Yesterday morning a relatively quiet announcement slipped out that made me stop mid-sip on my coffee: Verkada, the cloud-native physical security company everyone in enterprise tech has been whispering about, just hit a $5.8 billion valuation after a $100 million round led by Alphabet’s independent growth fund CapitalG.
That’s a cool $1.3 billion jump in less than a year. Not bad for a company that, in many ways, is still teaching an incredibly sleepy industry how to wake up and embrace the cloud.
The Round That Says Everything About Where Security Is Heading
Let me put this in perspective.
Most traditional physical security companies are still selling the same metal boxes they were peddling twenty years ago, just with slightly better resolution. Meanwhile, Verkada has quietly passed $1 billion in annualized bookings with over 30,000 customers worldwide. Retail chains, school districts, city governments, even electric-vehicle charging networks run on their platform.
And now Alphabet, one of the biggest AI players on the world has ever seen, is doubling down.
“I think Google saw the opportunity with us in the application of AI and everything we’re driving to apply AI to the physical security industry.”
Filip Kaliszan, CEO & co-founder of Verkada
When the CEO says that out loud, you listen.
Why CapitalG Wrote Another Check
CapitalG doesn’t throw money around lightly. These are the same folks who backed CrowdStrike, UiPath, and Lyft in their monster growth phases.
According to people close to the deal, the new $100 million is split between primary capital (to keep pushing AI development) and secondary (giving early employees and investors some liquidity). Classic late-stage growth round structure, but the signal is enormous: even in a cautious 2025 funding environment, top-tier growth funds are comfortable paying up for market leaders in enterprise AI infrastructure.
Perhaps the most interesting part? This round reportedly values Verkada at almost 6x its annualized bookings. That multiple would have been laughed at two years ago. Today it feels almost conservative when you look at the underlying momentum.
From “Nice Cameras” to an AI Operating System for the Physical World
I’ve followed Verkada since the early days when critics dismissed them as “just another overpriced camera company.”
The reality is they were never selling cameras. They were selling a cloud software platform that happened to have beautiful hardware attached. Think of it like the iPhone strategy applied to enterprise security: control the full stack, make everything ridiculously simple, then layer intelligence on top.
Fast-forward to September this year and they dropped more than 60 new AI features in a single release. My favorite? Something called AI-Powered Unified Timeline.
Instead of forcing security teams to manually scrub through dozens of camera feeds after an incident, the system automatically stitches together the relevant clips across cameras into one coherent timeline. It’s the kind of thing you watch in a demo and think “why has no one done this before?”
- Real-time people and vehicle search across thousands of cameras
- Automatic unusual activity detection
- Occupancy and foot-traffic analytics that rival dedicated retail solutions
- Instant export packages for law enforcement
- Even AI-generated incident summaries (yes, really)
All running on a browser tab. No servers. No NVRs. No DVRs gathering dust.
A $60 Billion Sleeping Giant
Here’s the stat that keeps investors up at night (in a good way):
The global physical security market is roughly $60 billion and overwhelmingly dominated by legacy vendors who still think “cloud” is a four-letter word.
CapitalG’s Derek Zanutto put it bluntly:
“This is a sleeping $60 billion market led by cameras that just record, not cameras that think.”
Verkada’s cameras currently ingest more than 20 million images per hour across their customer sites. That’s an insane data moat most AI companies would kill for. Every image feeds the models, every model improvement ships instantly to every customer. Classic flywheel stuff.
Will AI Replace Security Guards? Not So Fast
One question I always get: is all this AI going to put human guards out of work?
Kaliszan’s answer is refreshingly honest:
“Humans will be providing security to other humans for as long as I can think. But AI can empower these first responders to be more aware, have situational knowledge, and in some cases actually prevent problems from happening.”
He brought up the recent Louvre heist attempt as an example. Crown jewels nearly walked out the door because the legacy alarm system didn’t understand context. Modern AI systems can spot the difference between a janitor doing rounds at 2 a.m. and someone wearing a ski mask cutting glass.
That’s the shift: from reactive footage archives to proactive intelligence.
What Happens Next (My Take)
In my experience, once Alphabet puts serious growth capital behind a vertical software company, things tend to accelerate quickly. We saw it with CrowdStrike in cybersecurity, with Freshworks in customer support, with Stripe in payments.
Verkada is now perfectly positioned to do the same thing to the physical security world.
Expect:
- International expansion (they’re already strong in Europe and APAC, but there’s plenty of runway)
- Deeper AI features, possibly including generative capabilities for incident reports
- Partnerships with major cloud hyperscalers (running on Google Cloud already feels like step one)
- Eventually, an IPO when markets cooperate, this kind of growth trajectory rarely stays private forever
The bigger story, though, is that the line between cybersecurity and physical security is disappearing. Companies want one pane of glass for all threats. Verkada’s bet is that the same cloud console that manages your cameras today could manage access control, environmental sensors, even visitor management tomorrow.
If they pull that off at scale, $5.8 billion will look downright cheap in hindsight.
For now, congratulations to Filip and the entire Verkada team. In a year when many late-stage companies are struggling to raise flat rounds, growing 3-4x in valuation while crossing $1B in bookings is the kind of flex most founders only dream about.
The physical world is finally getting its software moment. And Verkada is writing the playbook in real time.
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