Russian surveillance tech startup NtechLab nets $13M from sovereign wealth funds

NtechLab, a startup that helps analyze footage captured by Moscow’s 100,000 surveillance cameras, just closed an investment of more than 1RUB billion ($13 million) to further global expansion.

The five-year-old company sells software that recognizes faces, silhouettes and actions on videos. It’s able to do so on a vast scale in real time, allowing clients to react promptly to situations It’s a key “differentiator” of the company, co-founder Artem Kukharenko told TechCrunch.

“There could be systems which can process, for example, 100 cameras. When there are a lot of cameras in a city, [these systems] connect 100 cameras from one part of the city, then disconnect them and connect another hundred cameras in another part of the city, so it’s not so interesting,” he suggested.

The latest round, financed by Russia’s sovereign wealth fund, the Russian Direct Investment Fund, and an undisclosed sovereign wealth fund from the Middle East, certainly carries more strategic than financial importance. The company broke even last year with revenue reaching $8 million, three times the number from the previous year, ane expects to finish 2020 at a similar growth pace.

Nonetheless, the new round will enable the startup to develop new capabilities such as automatic detection of aggressive behavior and vehicle recognition as it seeks new customers in its key markets of the Middle East, Southeast Asia and Latin America. City contracts have a major revenue driver for the firm, but it has plans to woo non-government clients, such as those in the entertainment industry, finance, trade and hospitality.

The company currently boasts clients in 30 cities across 15 countries in the Commonwealth of Independent States (CIS) bloc, Middle East, Latin America, Southeast Asia and Europe.

These customers may procure from a variety of hardware vendors featuring different graphic processing units (GPUs) to carry out computer vision tasks. As such, NtechLab needs to ensure it’s constantly in tune with different GPU suppliers. Ten years ago, Nvidia was the go-to solution, recalled Kukharenko, but rivals such as Intel and Huawei have cropped up in recent times.

The Moscow-based startup began life as a consumer software that allowed users to find someone’s online profile by uploading a photo of the person. It later pivoted to video and has since attracted government clients keen to deploy facial recognition in law enforcement. For instance, during the COVID-19 pandemic, the Russian government uses NtechLab’s system to monitor large gatherings and implement access control.

Around the world, authorities have rushed to implement similar forms of public health monitoring and tracking for virus control. While these projects are usually well-meaning, they inspire a much-needed debate around privacy, discrimination, and other consequences brought by the scramble for large-scale data solutions. NtechLab’s view is that when used properly, video surveillance generally does more good than harm.

“If you can monitor people quite [effectively], you don’t need to close all people in the city… The problem is people who don’t respect the laws. When you can monitor these people and [impose] a penalty on them, you can control the situation better,” argued Alexander Kabakov, the other co-founder of the company.

As it expands globally, NtechLab inevitably comes across customers who misuse or abuse its algorithms. While it claimed to keep all customer data private and have no control over how its software is used, the company strives to “create a process that can be in compliance with local laws,” said Kukharenko.

“We vet our partners so we can trust them, and we know that they will not use our technology for bad purposes.”