Japanese Terra Drone Secures $70M Series B Funding to Accelerate Global Expansion
As the use of aircraft like drones, electric vertical take-off and landing vehicles, and unmanned aerial vehicles take off, Japanese startup Terra Drone wants to make sure air traffic isn’t overlooked.
“Our airspace is going to get more crowded than ever, but most companies today are just focused on hardware development,” said Terra Drone CEO and Founder Toru Tokushige, who is also CEO of Terra Motors. which develops electric vehicles. “There is an urgent need for a global air traffic management solution to enable safe and efficient drone and urban air mobility (UAM) operations, and Terra Drone aims to be the primary player in building the digital infrastructure in the sky.”
Founded in 2016, Terra Drone develops drone software, hardware and traffic management solutions for unmanned aircraft systems. The company announced on Wednesday that it has closed a $70 million (8 billion yen) Series B funding round led by Mitsui Corporation. The latest round, which brings its total funding raised to $83m, comes about a year after raising $14.4m Series A in February 2021.
Other investors SBI Investment, Tokyu Land Corporation, Kushu Electric Power, Seika Corporation, JOIN (Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development) and outgoing investor Venture Lab Investment also joined the round.
Teppei Seki, COO of Terra Drone, said in an interview with TechCrunch that the company will use the B-series to grow its workforce and fuel its global expansion into Europe, the United States and Southeast Asia. The funds will also be used to acquire businesses in those regions, said Seki, who did not disclose the valuation of the business.
The company acquired Dutch-based drone company Terra Inspectioneering in 2018 and invested in Belgian drone company Unifly in 2016.
Additionally, the startup says its proceeds will be used to support autonomous technology beyond visual line of sight for drone and air taxi operations through its Unmanned Aircraft System traffic management solutions and strengthen the development of Terra’s UAM services.
Asked about his next plan after Series B, Seki told TechCrunch that Terra Drone is considering going public. The company may also raise other funding ahead of its IPO, Seki added.
Terra Drone has approximately 500 customers, including oil and gas companies such as Shell, Chevron, BP, ExxonMobil, ConocoPhillips, Vopak and Japan’s Inpex Corporation, as well as chemical companies such as BASF and Kansai Electric Power. Seki told TechCrunch that the company also provides its inspection services to food company Bunge and survey services to construction companies.
Notably, the oil and gas industry, which primarily focuses on inspecting rigs for safety and better performance, invests around $50.76 billion a year to monitor onshore and offshore pipelines, according to a report. from Fortune Business Insights published in February 2022. Terra Drones can identify defects like corrosion in structures, coating defects and other structural damage, Seki said. Global drone surveillance market is expected to reach $476.5 million in 2028, from $142 million in 2021. Global UAM market is expected to reach $1.5 trillion by 2040, according to the bridge IR from Terra.
Terra Drone is working on projects with a number of Japanese companies and governments such as TEPCO, Japan Airlines, KDDI, Japan’s main telecommunications company, Inpex and the Ministry of Land, Infrastructure and Transport. The startup also worked with the Japan Aerospace Exploration Agency (JAXA) to coordinate the management of manned and unmanned aircraft flights.
Terra Drone Unmanned Traffic Management
Seki told TechCrunch that the company’s main specialization and differentiation is its patented technology that allows the drone to press the ultrasonic test, or ultrasonic thickness probe, against a surface without the scaffold to measure the thickness of the walls.
“The focus on increasing recurring revenue through the sale of survey-grade hardware and software such as Terra LiDAR (light detection and ranging) and Terra LiDAR Cloud, providing specialized services such as ultrasonic thickness (UT) and non-destructive testing (NDT) using drones via our [subsidiary] Terra Inspectioneering; and a strategic consolidation of overseas business has positioned us well for success,” Tokushige said. “We will be able to scale operations and innovation faster.”
Terra Drone competes with global drone companies including Sky-Futures in the UK, CyberHawk and Aerodyne in Malaysia. AirMap and France-based YellowScan, a developer of UAV lidar systems for drones, are also competitors, Seki mentioned.
Terra Drone has 60 employees, while its subsidiaries have around 500 employees around the world.