VCs look the other way as they give another $205 million to Verkada, whose tech has been repeatedly abused

Verkada, a six-year-old manufacturer of building security tools, sells video security cameras, door-based access control, environmental sensors and alarms, all connected on a cloud. platform - just raised $205M in Series D funding at a $3.2B valuation.

In total, Verkada has raised $360 million in funding, it says.

On the one hand, it's easy to appreciate what attracted investors like Linse Capital to Verkada's new funding round, which also included Michael Dell's MSD Partners, Sequoia Capital, Next47, Meritech Capital and Felicis Ventures.

Surveillance is a lucrative industry, and from what Verkada says, since its previous funding round in 2020, it has quadrupled its workforce, adding over 1,000 new employees; it opened six new offices; and it has quadrupled its customer base to more than 13,000. Among the wide range of customers listed on its website are Virgin Hyperloop, the Hartford Police Department, and schools in the city of San Rafael in California.

Damn it, did investors have to turn away from a lot of the so-called horrors to continue funding the company with the same management team in place. Indeed, numerous reports in recent years (which have become surprisingly hard to find online) could easily have nudged investors in the opposite direction.

In March 2021, for example, Bloomberg reported that more than 100 Verkada employees could look through the cameras of its thousands of customers, including schools and police departments, as well as global corporations like the company of Cloudlare internet services.

According to the report, security within the security firm was so lax that Verkada was breached by hackers who gained access to an account allowing them to view all live streams and archived videos of Verkada's customers. Verkada. At the time, that included 150,000 cameras, including inside Tesla, police departments, and hospitals.

A related Bloomberg finding based on interviews with current and former employees was that, although Verkada offered a "privacy mode" for customers, some accounts allowed Verkada employees to disable this feature and view the images. of the camera.

Tesla's Chinese subsidiary later told Reuters the breach only affected one of its supplier's production facilities in Henan province, west of Shanghai. Additionally, a Swiss hacker named Tillie Kottmann was quickly indicted by the U.S. government on multiple counts of wire fraud, conspiracy, and impersonation related to the Verkada hack.

Nevertheless, damage was done. Worse for Verkada, Bloomberg reported a few weeks later that, according to current and former employees at the time, the inattention to data protection was "emblematic of a larger 'bro culture' that was sophomoric and obsessed with sales, and condoned harassment of women, frequent parties, and misleading marketing claims. (The company's Glassdoor reviews, many of which were published this summer, paint a similar picture. perfect where there really aren't any downsides that come to mind!" - others warn potential candidates to stay away. "Completely toxic environment, complete with a sales leadership that gives the priority to all bad behavior," reads one review.)

Meanwhile, both stories pale in comparison to an earlier incident that was first reported by IPVM, a security and surveillance industry research group and later verified by Vice .

What happened: In 2019, a sales manager at Verkada's offices in downtown San Mateo, California, used the company's own security cameras inside the building to taking and posting photos of female co-workers on the Slack channel called #RawVerkadawgz where, per Vice, they made sexually explicit jokes about co-workers who worked at the company.

In one case, a photo of an employee with her mouth wide open was allegedly captured and commented on in...