Verisure CEO Sees More Reward Than Risk in AI Adoption

Austin Lally has faced market turbulence since guiding the alarm group to Europe’s biggest IPO last year.

Austin Lally has faced market turbulence since guiding the alarm group to Europe’s biggest IPO last year. You can save this article by registering for free here. Or sign-in if you have an account. (Bloomberg) — Austin Lally may have led Europe’s largest initial public offering in 2025 when he successfully listed Verisure Plc in Sweden, but since then, life for the chief executive officer of the alarm group hasn’t exactly been smooth-sailing.

Since its October debut in Stockholm, Verisure has lost over a quarter of its market value, with the firm getting caught up in a broader concerns about disruption from artificial intelligence. Joining Verisure over a decade ago after a 26-year career with Procter & Gamble Co., Lally sat down with Bloomberg to talk about how to distinguish a Scottish burglar from a German shepherd, how AI is helping to secure gardens and why he prefers organic growth to acquisitions.

The transcript has been edited for length and clarity. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. Lally: There’s always short term, reaction and volatility. What I really firmly believe is that over the medium term, if you keep delivering, markets will find the true value of a company.  I didn’t sell any shares at the IPO.

And it wasn’t because somehow my hands were tied. It was because I know where this company’s gonna be in two, three, four, five years’ time.   A: We would have been successful if we’d listed on other exchanges. But Stockholm seemed like the natural choice. It’s not our number one market now. But it’s still sizable. Importantly, it’s really at the center of our R&D and innovation program.  When you get to the listing considerations, it came down to two things.

The first was a lot of strong local institutional support and interest. The second was the realization that it didn’t come at the expense of international investors. Stockholm wasn’t a barrier. So I think we got the best of both worlds. A: We actually think we’re going to be a big beneficiary of AI. The main pillars of our business are detection, verification and identification. If you put enough devices into a home, even my competitors can probably do a reasonable job of detecting incidents.

I think we do it better.  The real challenge is the false positives that get generated. You have this puzzle, which is how do you distinguish between a big German dog and a small Scottish burglar. We even had tests in our R&D laboratories. We called it the ‘crawling belly test.’ We’re the clear market leader, with more than 6 million customers, we’re now just under 6.2 million customers.

AI is, in a sense, the big edge, because when you talk about algorithms, they’re basically as good as the training data. And we’ve basically got more training data than everybody else, because we’re five times bigger.  A: We started in Sweden. A few years later, we went into Spain. Penetration in those countries is only 10%, despite the fact that we’ve been in these markets for 30-plus years.

Nobody at Verisure uses the word ‘mature.’ There’s still plenty of runway. The idea that prompted me to go from P&G to Verisure was this penetration question.  In terms of strategies, we’re focused on Europe and Latin America. There’s plenty of growth opportunity: 50% of my growth is going to come from these other Europe countries, like France, the UK, and Italy. Q: Do you think that low penetration rates in Europe relative to the US are related to concerns about privacy and surveillance?

How do you deal with that? A: Privacy concerns are legitimate and should be respected. You’ve got to find technological solutions that allow you to protect the customer, but also protect privacy at the same time.  I’ll give you an example. If you’re going to protect a garden, historically that was quite complicated, because you’ve got changing light, changing atmospheric conditions. So you’ve got to figure out actually how you can see through the noise accurately.  But then you have the privacy topic, which is how do I cover the yard without filming the street?

What’s interesting now with AI is you can actually just automatically screen the areas where you don’t want to film. It’s a major step forward using AI to deal with some of those topics.  Q: Given what you said about how tough it is to grow, would you consider buying one of your rivals?  A: We’ve been almost universally an organic story, and very deliberately. If an asset comes along, we take a look.  But when we look, I’m usually filtering for three things.

The first is really the quality of the customer. I mean, the loyalty. Our attrition rate at 7.4% is the lowest in the industry. Generally, every portfolio I look at has higher attrition and would be dilutive to our profile.  The second filter’s profitability. Because we have our own system, we’re basically a premium player. Generally, the portfolios that I look at are lower priced and less profitable.  The third filter is also technology.

Is it old-fashioned tech on the wall that I’m going to have to take down and replace anyway? Then it’s probably smarter just to go and take that customer directly.  [The deal in] Mexico in 2025 was quite a special case. We had already started a process to enter Mexico organically when by coincidence Johnson Controls International announced that it was going to dispose of its security assets. Looking forward, we don’t see M&A being a big part of the growth story.  Q: Hellman & Friedman is your biggest shareholder.

Do you think expectations of an eventual exit are weighing on the shares? A: The partnership we have with Hellman & Friedman has been excellent. We’ve been together now for almost 12 years. They’re still strongly invested in the company today. Why? It’s basically because we’ve compounded like double-digit every single year through that whole period, so it was a great place for anyone to keep their capital.  I think markets always expect financial sponsors to sell down eventually, right?

It’s really a question of timing and performance. With this track record that we’ve got and the growth runway ahead, I fully expect there’ll be plenty of demand for Verisure over time.  Q: What are your tips for leaders looking to IPO? What are your learning experiences?  Number one is take the time to do broad, deep education. I started meeting potential investors in Verisure at the end of 2024.

We had had many dozens of meetings over that period. And we didn’t expect somebody to get the whole Verisure story in one meeting of 45 minutes.  The second thing that was important was the fact that we could be so transparent about the company’s history and track record — detail in every KPI that matters for a decade. The third thing that was interesting was we’ve had a lot of publicly traded debt all through the ownership cycle.

We may not have been incredibly well-known on the equity side, but we were very well-known on the credit and debt side. We had the discipline of doing a quarterly call for bondholders. I always felt these calls were gonna be a dress rehearsal for talking to public investors later.  My passions outside of work are quite broad and varied. I’m a Liverpool season ticket holder. So, I still get to Anfield fairly often. I’ve got a music room at home where the concept is that you should be able to play every recorded format.

Just like I have every type of music, I have every type of bicycle.  The book I’m recommending to everybody at the moment is called “Breakneck” by Dan Wang. It’s a very interesting book about the pace of development in China versus the US, but more generally around AI.  Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful.

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This report covers the latest developments in artificial intelligence. The information presented highlights key changes and updates that are relevant to those following this topic.

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