This originally caught my attention from a July 2022 VIC article (below). It’s a very small company at CAD21m market cap or so. They have a profitable residential security business. Announced they were selling a major division (Logixx) for ~$24m and will return their smaller segment (Avante). What will they do next?
Avante Security provides alarms, monitoring, rapid response (through their own responders) and other services to ultra high net worth individuals in Ontario. It’s like ADT but with 10x higher prices and 1/10th the attrition. The pitch is that if you have a home that costs $10mm you’re willing to pay a bit more to get better monitoring and a 6 minute response time. In most locations a police force won’t even respond to an alarm unless it’s a confirmed issue, and even then it could take 20-30 minutes.
Clearly the market for this type of service is limited, but Avante is in only 3 of 12 potential Canadian markets and there is still room to grow this business. Growth mostly happens when Avante acquires customers in specific zip codes from a larger monitoring station or from a small company. They’ve found that they can convert 25% or more monitoring customers right away to their “platinum” service, which costs $5-6k a year vs. $50 a month for just monitoring. Platinum really is a white glove service: they will do things like check mail and get packages when you’re on vacation, do drive-bys to make sure nothing is wrong, and so on. Customers clearly value the service given the low attrition levels.