Ajax Systems: a Professional Wireless Security System

In our new series, we look at the examples of brilliant Ukrainian startups that have attracted funding and found success in international markets.

Website: ajax.systems

Founders: Oleksandr Konotopsky

Offices: Kyiv, Kharkiv, (representations: UAE, Great Britain, Poland)

Company Valuation: $40 - $60 million (2019)

Total Funding: $11 million over 2 rounds

Employees: 800 (20% of which are in R&D)

Founded In: 2011


Background

Entrepreneur Oleksandr Konotopsky started his own business at the age of 21 by launching the online security store secur.ua. The project was an instant success and became one of the largest distributors of security products in Ukraine. At the time, the quality of security devices purchased from China was often questionable. After taking a trip to China himself, Oleksandr thought of creating his own product. He wanted to create a smart wireless security system that could occupy a niche in the production of medium-priced security systems, between cheap Chinese and expensive Western brands.

In 2011, Konotop founded a new company and named it Ajax Systems. Oleksandr and his team decided to create a new security system from scratch, with a communication protocol, control panel, detectors, a cloud server, and its own mobile application.

Motion Protect Outdoor - a wireless external motion detector of the Ajax security system.

As the e-commerce market grows, technologies are evolving and more internationally recognized projects are developed in Ukraine. Ajax Systems has successfully entered the global market, with a key market in Europe. The company has 500,000 users worldwide and 25,000 installers who use Ajax equipment in their work. Ajax has its own technologies: Jeweler communication protocol, Malevich operating system, and algorithms in sensors. In Ukraine, Ajax Systems's competitors include Kharkiv-based Tiras, and in the West, the companies Ring (a Ukrainian-based startup bought by Amazon) and Nest (owned by Google). However, competitive products require a wired connection, and Ajax occupies the niche of products using wireless connectivity.

Product

In 2020, the Ajax Systems product line includes 27 wireless devices for protection against intrusion and accidents, as well as devices for automating security and improving task efficiency at home. The central unit of the system coordinates the connected devices, while maintaining communication with users and the security company. At the customer's request, it is possible to connect a motion detector to respond to any door/window openings. Other types of detectors can be used to notify users of smoke and gas leaks. The company also offers installation of alarms, signal expanders, touch keypads, alarm buttons, smart plugs, and relays to control electrical appliances.

The Ajax app is a modern, reliable gadget with a concise design and a simple control interface for a smartphone. The security system can be managed via iOS, Android, mac OS and Windows apps.

Ajax Security System - Free mobile application for users.

Funding

The startup received its first investment of $1 million in the 2015 Seed round from SMRK VC Fund, a Ukrainian venture fund founded by MacPaw CEO Oleksandr Kosovan and Andriy Dovzhenko and financing companies in the early and late stages. The funds raised were used to expand the product line and create an integrated security system. Four years later, as part of the Series A round, investment company Horizon Capital invested $10 million in Ajax Systems, and acquired a partial stake in SMRK VC Fund and the company's management. One of the reasons why Ajax signed a deal with Horizon was their experience in bringing companies to IPO.

Locations

Ajax Systems orders components for devices from manufacturers around the world, but to guarantee the high quality of their products, all stages of the production process take place at the plant in Kyiv. The main R&D office is located in the capital of Ukraine, while the company also has an R&D office in Kharkiv and representative offices in the UAE and Great Britain. Ajax Systems immediately ships all its products to distributors, so they do not have their own warehouses.

Ajax Systems Products.

The production facilities (where the sensors are assembled), the R&D laboratory (where the sensors are developed), and several large open-space offices in Kyiv are located in a 5-storey building.

There are few hardware companies in Ukraine, and finding new employees who have experience in long-term development and launch of products is a difficult task. Ajax is always looking for talent, and instead of multifunctional workers, the company looks for highly specialized people. However, 60% of production processes are performed on assembly lines, and soon it will be possible to replace many individual jobs. Today, Ajax Systems minimizes the use of outsourcing and concentrates on its own production. The company employs more than 800 people, and over the past 4 years, the startup has grown 100 times, while production has reached 220 thousand units per month.

Achievements

In 2020, there are no wireless security companies similar to Ajax Systems in Ukraine. All devices of the company have passed European certification and meet the requirements of the security system standard EN 50131 and fire protection standard EN 14604. Ajax Systems was awarded the highest level of wireless security systems. The company has received awards from the most prestigious international security shows: "Security System of the Year" IFSEC (UK), "Best Innovative Product" MIPS Securika, silver medalist of the Expoprotection Awards (France). Ajax Systems has introduced a beta version of its own central monitoring station - 911, which is relevant for security companies and large corporate clients. With it, any security company will be ready to respond to an alarm in a few minutes. In addition, it is possible to use groups, round-the-clock security mode, and even manage third-party devices.

Plans

One of the company’s priorities is to create a smart home platform based on Ajax, and the first step has already been taken - OS Malevich 2.8 and Ajax automation scenarios not only report threats, but also advise users how to actively counter them. Ajax Systems plans to provide climate and lighting control features, for which a separate R&D team has already been formed.

Ajax Home Protection.

The company’s long term plan is to make an IPO, and there is also a plan for an options program for a wider range of employees of the company.

In the following posts we will talk about successful Ukrainian startups that were able to create a quality product and an effective team. We will learn how their ideas came about, how they chose the right partners and found their first investment. The next company will be Ring - a home security and smart home company.