Fully autonomous drone maker Airobotics nabs $32.5M, expands into defense

Airobotics, a startup building autonomous drones for the enterprise sector that do not require humans to get involved in any aspect of operating them, has picked up $32.5 million in funding to expand its business into defense and homeland security, and to expand its business globally.

The Series C round was led by BlueRun Ventures China, with participation also from Microsoft Ventures, OurCrowd.com and an another unnamed strategic investor. Microsoft is also a strategic in this case — Ran Krauss, Airobotics’ CEO and co-founder (and a longtime entrepreneur in the unmanned aircraft industry), said in an interview that his company is leveraging Microsoft’s image recognition, analytics and cloud computing in its service. 

The total raised by the Israeli-based Airobotics to date is $61 million, with other notable investors in the past including CRV, BRV, Noam Bardin (CEO of Waze), Richard Wooldridge (former COO/GTM of building 8 at Facebook and former COO of Google ATAP) and David Roux (Co-Founder and former Chairman of Silver Lake Partners).

Krauss said in an interview that the company is not commenting on its valuation, except to note that it is “very much” an up round. Funderbeam estimates the valuation at $400 million, although Zirra puts it at considerably less than that, $150 million – $200 million pre-money, specifically more like $170 million – $190 million, according to Zirra’s Aner Ravon. We’re continuing to ask around.

While the drone industry is still at a relatively early stage, it appears to be developing across a few distinct trajectories: consumer, light enterprise and industrial. Up to now, Airobotics has very firmly placed itself in the third of these categories: the company works in industries like mining, energy, and other tricky verticals that would make the best use of services that have been built without the need for human involvement in their operation.

“There are several reasons for why human-operated systems are not ideal,” said Efrat Fenigson, VP Marketing at Airobotics. “One is the cost: employing a pilot to operate a drone is a very expensive thing to do. And you hire a company to provide a drone service, that can cost between $5,000 and $10,000 a day. Two is precision: if you are looking to run on a daily basis a human cannot fly a mission accurately ten times. A computer can. And third is the availability of people: they are not always there when you need them. When you work with drones in remote or rural areas, or dangerous places, you may not want to send people there.”

The premise behind adding homeland security and defense follows this logic too: the idea, Krass said, is for drones to be able to monitor and help secure borders, high-risk facilities, and to monitor for terrorism and other kinds of warfare.

For now, the only country where Airobotics has received full approval to operate is in its home country of Israel, which — partly because of its position in the Middle East and ongoing conflicts with neighbors — has taken a leadership role globally in building defense systems and doubling down on using technology to advance itself.

Second on the list are Australia and the U.S., where the startup has had a partial approval for its services: they can operate, but a human needs to observe them. Krauss said he believes that this is just a stepping stone and that regulation in these and other countries will come along over time and eventually Airobotics (and competitors) will also be able to operate services in full.

“We are thrilled to lead this round of investment,” says Jiajie Wu, Executive Director, BlueRun Ventures China, in a statement. “Airobotics is a game changer, which has successfully matched revolutionary drone technologies with real industrial needs. In addition to its existing customer base in Western countries, we believe Airobotics will see substantial opportunities in Asia, which is one of the world’s largest industrial markets.”

While tricky industrial applications have been the first step for Airobotics, it is not the last.

“Our vision is much broader than industrial or defense,” he said. “These are massive industries, but for me they are just a stepping stone. The holy grail is to go into cities.”

One area where Krauss is looking is urban deployments, but while logistics are interesting, that may take some time.

When you talk about flying in cities, I don’t think that tech, or even regulation, are the barriers. I believe that the public is the barrier: when we talk about package delivery from Amazon i’m not sure that people would be happy with massive fleets of drones just to get their packages quicker.”

More interesting, he said, would be working with organizations like police or fire services to station fleets of drones — similar to how you have cell towers today — to help facilitate their work. 

“You could create docking stations, and then if there is a building on fire, it makes perfect sense to fly a drone there and stream a live video to a firetruck before it even gets there. So not a lot of drones, but a few very important ones. That’s a measurable a calculated risk to have, similar to the kind you accept when you allow ambulances to drive through red lights. We’re going to get there.”