Cloud-based smart security company Rhombus Inc. has raised $45 million to grow its customer base and develop new products and innovations in physical security.
The new equity investment was led by San Francisco-based venture capital investor NightDragon, which is focused on companies in cybersecurity, security and privacy.
NightDragon will support Rhombus as it scales up its sales by supporting its distribution with systems integrators, value-added resellers and other sales channels, said Morgan Kyauk, managing director of NightDragon. He also takes a seat on the board of directors of Sacramento-based Rhombus.
Kyauk said NightDragon looks for companies that have repeatable and scalable business that can grow into hundreds of millions of dollars in sales.
“We look for those traits,” Kyauk said, adding that Rhombus fits that criteria, and he said that Rhombus has a positive reputation with its customers. He said NightDragon was looking at companies in this space because cloud-based security technology is poised for growth.
Rhombus designs and offers a unified and cloud-based physical security system that can include AI-controlled smart cameras, access controls, sensors, microphones and alarms — all accessible and manageable via remote computer screen or smartphone dashboard.
Rhombus’ technology is easy for customers to use, and, in many cases, its cloud-accessible dashboard replaces a security system wired to a physical digital video recorder that resides on site.
“This is an industry that is going through a very big inflection point,” said Garrett Larsson, co-founder and CEO of Rhombus. “Most of the incumbents in the security industry are 100-year-old companies, and there hasn’t been a focus for them on a lot of technological innovation."
Rhombus will use the funding to invest in new technologies and also in sales and marketing, including in international sales. The company recently opened an office in the United Kingdom for international sales, Larsson said. It also recently expanded into a larger Sacramento office in the trendy Ice Blocks development.
He said market demand for its security products is surging as more customers seek to shift to integrated security solutions that leverage the power of the cloud, artificial intelligence and advanced analytics for their security strategy.
Since 2016, Rhombus has offered wireless and artificial intelligence-enabled video surveillance cameras that can track movement, identify faces and count pedestrian traffic, all of which can be monitored remotely. It has also added sophisticated audio surveillance technology and last year it added technology-enabled remote door-access sensors to its suite of offerings.
Rhombus does its own engineering and designs its own software and firmware. That in-house engineering was an attraction for NightDragon, Kyauk said. One of the weak points in security is using weak firmware or off-the-shelf, internet-of-things software. Rhombus built its technology stack in house, and it owns that, he said.
Rhombus employs about 200 people, with most of them in Sacramento. One of the concerns Rhombus had when it moved to Sacramento from the Bay Area in 2017 was the ability to find tech talent locally. There is a perception that Sacramento doesn’t have the talent density of the Bay Area, Larsson said. But he said that it has been able to find all the people it needs, and it has had success hiring engineers and computer science talent from the University of California Davis.
This current round included participation from Bluestone Equity Partners, and existing investors Caden Capital, Tru Arrow Partners, Cota Capital and Uncorrelated Ventures.
In February, Rhombus secured $26 million in equity funding along with $17 million in debt financing. The $26 million equity raise was co-led by New York-based Tru Arrow Partners and San Francisco-based Cota Capital. Tru Arrow was a new investor in February. NightDragon is a new investor in this round.
In October 2021, Rhombus raised a $10 million funding round led by Cota Capital, along with investors MSD Partners, Lemnos and Promus Ventures. That round brought the company to $20 million raised at that time.
The new funding brings Rhombus to more than $90 million in equity financing.
