Video firm draws eyes of investors

Mary Jane Credeur, Atlanta Business Journal, March 2003

Investors were skeptical the first time they looked at video surveillance startup Brickstream Corp., whose executives claimed their technology could track customer traffic patterns to save stores money and speed up checkout lines.

Over the past year, however, Brickstream has added several large customers and the company just received a $6.2 million investment from Virginia-based Columbia Capital LLC and Mohr, Davidow Ventures LLC (MDV). Brickstream had previously raised about $1 million from founders and other individuals.

"We saw the company a year ago and thought it was interesting, but we weren't sure any customers would buy it," said Mike Sheridan, a partner with MDV who oversaw the Brickstream deal and now sits on the company's board. "Boy, were we wrong. There's been a lot of word of mouth, and customers love the technology because it works so well."

Brickstream makes software that can be attached to existing video cameras in convenience stores, drug stores or other high-traffic areas like banks to monitor customer movement through the store as well as in checkout lines so that clerks can be added if lines grow too long.

The technology also can be used to determine whether customers look at and respond to in-store promotions, such as special product displays or advertising. The company will use the recent round of funding to expand its sales and marketing efforts and build more functionality into its software, said Brickstream founder and CEO Amir Hudda, who previously ran Entevo Corp., which was bought for $125 million in early 2000.

Brickstream, which has dual headquarters in Atlanta and Virginia, has 15 employees in Atlanta and will add 15 employees here in the coming months, Hudda said. "Last year was a very difficult business environment, yet we closed quite a few big deals with large retailers and banks," Hudda said. "We felt it was compelling to take in this money to help grow the company and continue to add more customers in this soft economy."

The only customer Brickstream can reference by name is Ohio-based TravelCenters of America Inc., which operates a chain of convenience stores along major highways. Hudda said the company is also doing business with several large retail stores, drug stores and banks, although those customers won't let the company use their names. Brickstream's software uses video cameras that are mounted on ceilings, so individual customers' faces cannot be seen.

Customers may not like being monitored as they do their shopping, said Robert Johnson, a partner in the technology practice of Deloitte & Touche LLP's Atlanta office. Although retailers are looking for technology that can help them operate more efficiently, some retailers may shy away from technology that makes shoppers uncomfortable, he said.

"There's been a lot of backlash from customers and privacy groups who are concerned about being spied on," Johnson said. "It's a very controversial issue - how do you balance the benefits to the store with the benefits to the customer? Maybe customers are willing to be tracked if it means shorter checkout lines, but maybe they aren't."

Hudda dismissed concerns about privacy, pointing out that many retailers already use video surveillance technology to reduce theft. Hudda said the biggest draw for potential customers is the up-front investment required to install the Brickstream system. Businesses can install the Brickstream system at a single store for $25,000 to $200,000, depending on store size. Most customers make up their Brickstream investment within a year of buying the technology, Hudda said.

This is the pitch Brickstream will make during the coming year. Hudda said the company will continue to target the 10 largest retailers, banks and other quick-service stores that deal with high volumes of customer traffic.

"We need to have more feet on the street, and create more case studies and get more referenceable customers," Hudda said. Sheridan, the investor, said the 2-year-old company likely will accomplish its goal. "This is an experienced team, they've done startups before, they've invested their own money in the company and they have several large customers," Sheridan said. "What's not to like about that?"

Reach Mary Jane Credeur at mjcredeur@bizjournals.com.