Market Tailwinds and Pending Inflection Point
Irisity AB (”Irisity” or ”the Company”) is a leading provider of AI-driven video analytics solutions, specializing in advanced software that transforms conventional security cameras into intelligent detection systems, all while upholding stringent privacy standards. With a presence in more than 90 countries, Irisity addresses a global market through the Company’s three primary segments: AI Solutions, AI Products, and AI Software as a Service (SaaS). With the strategic acquisition of Ultinous in H1-24, Irisity has enhanced its AI capabilities, integrating cutting-edge generative AI technologies aimed at capturing opportunities in the mid-market segment, which paves the wave for substantial growth potential in the coming years, why Analyst Group sees favorable opportunities for Irisity to capitalize on a high-growth market with its proprietary technology. Overall, Analyst Group believe the ongoing rights issue constitute an attractive entry point for investors at a Pre-Money valuation of SEK 80.7m.
- Accelerating Quote-to-Cash
Through the acquisition of Ultinous in H1-24, Irisity expanded the product offering through the addition of the AI-products segment. With a partner-based go-to-market strategy, Irisity aims to prioritize growth in this area, thereby shortening the quote-to-cash cycle by allowing partners to absorb a larger portion of the customer acquisition cost (CAC). This approach is expected to enable a capital-light growth strategy, an essential step towards positive cash flow.
- Recurring Revenue
The recurring revenue is derived from three primary sources: Software Up-grade Plans (SUP), the Security as a Service subsegment, and the remainder of the AI SaaS segment. The AI SaaS segment accounts for 35% of total sales and is a software only based offering. This cloud-connected solution requires no physical hardware deployment on-site enabling scalability and minimal operational friction with a recurring revenue stream from each camera connected.
- Extensive and Growing Market
The global AI surveillance market, which currently represents around 10% of the broader security surveillance industry, is expected to grow at a notably higher rate than the overall market, contributing significantly to the sector’s expansion. The global AI in surveillance market is projected to witness a CAGR of 23.7%, reaching around USD 16.3bn by 2028, showcasing the markets robust estimated growth. Irisity is well positioned to capitalize on this expanding market.
