As the use of aircraft such as drones, electric vertical take-off and landing vehicles and unmanned aerial vehicles takes off, Japanese startup Terra Drone wants to ensure that aerial human trafficking is not overlooked.
“Our skies will become busier than ever, but most companies today are only focusing on hardware development,” said Terra Drone CEO and founder Toru Tokushige, who also serves as 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 operations with drones and urban air mobility (UAM), and Terra Drone aims to be the leading player building the digital infrastructure in the air.”
Terra Drone, founded in 2016, develops drone software, hardware and traffic management solutions for unmanned aircraft. The company said Wednesday it has closed a $70 million (JPY 8 billion) Series B round led by Mitsui Corporation. The latest round, which brings total funding to $83 million, comes about a year after raising $14.4 million in 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 thenewsupdate that the company will use the Series B to increase its workforce and fuel its global expansion into Europe, the US and Southeast Asia. The funds will also be used to acquire companies in those regions, Seki said, who did not disclose the company’s valuation.
The company acquired a Netherlands-based drone company, Terra Inspectioneering, in 2018 and invested in Belgian drone company Unifly in 2016.
In addition, the startup says the proceeds will be used to support autonomous beyond visual line of sight technology for drone and air taxi operations through its unmanned aircraft traffic management solutions and to bolster the development of Terra’s UAM services.
When asked about the next plan after Series B, Seki told thenewsupdate that Terra Drone is considering going public. The company could also raise 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 thenewsupdate that the company also provides its inspection services to food company Bunge and investigation services to construction companies.
In particular, the oil and gas industry, which focuses primarily on drilling rig inspections for safety and improved performance, invests approximately $50.76 billion annually to inspect onshore and offshore pipelines, according to a Fortune Business Insights report released in February 2022. Terra Drones can identify defects such as corrosion in structures, defective coatings and other structural damage, Seki said. The global drone surveillance market is expected to grow to $476.5 million in 2028, from $142 million in 2021. The global UAM market is expected to grow to $1.5 trillion by 2040, according to Terra’s IR deck .
Terra Drone is working on projects with a number of Japanese companies and governments, such as TEPCO, Japan Airlines, KDDI, Japan’s leading telco company, Inpex, and the Ministry of Land, Infrastructure and Transport. The startup has also partnered with the Japan Aerospace Exploration Agency (JAXA) to coordinate flight management of manned and unmanned aircraft.
Seki told thenewsupdate that the company’s main specialization and differentiator is its patented technology that allows the drone to press the ultrasonic test or ultrasonic thickness probe against a surface without the scaffolding to measure the thickness of walls.
“A focus on increasing recurring revenues through the sale of research-grade hardware and software such as Terra LiDAR (Light Detection and Range) and Terra LiDAR Cloud, which provide specialized services such as Ultrasonic Thickness Measurement (UT) and Non-Destructive Testing (NDT ) using drones through our [subsidiary] Terra Inspection; and a strategic consolidation of overseas operations has positioned us well for success,” said Tokushige. “We will be able to scale operations and innovation faster.”
Terra Drone competes with global drone companies, including UK-based Sky-Futures, CyberHawk and Malaysian Aerodyne. AirMap and France-based YellowScan, a developer of UAV lidar systems for drones, are also competitors, Seki said.
Terra Drone has 60 employees, while its subsidiaries have about 500 employees around the world.