Accelerate - March 2015

New funding frontiers

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Considered a brave step by some, crowdfunding has provided the equity boost needed to take a New Zealand aerial robotics company on to the world stage.

“It’s a great opportunity for many people to join in on what is not only a good chance of financial yield, but is also something really interesting and meaningful.”

Raglan-based drone manufacturer and marketer Aeronavics is a global industry innovator renowned for their high quality systems.

This is not just the12-person company talking itself up. A number of aviation authorities have heaped praise on the company, which has produced one of only two drones in the world to be granted an exemption by America’s FAA to fly in Hollywood. This has self-financed the drone’s rapid development into what are currently five base models that vary in their flight duration and payload capacity capabilities.

Generally, the less the drone has to carry, the longer it can fly. The type of payload defines the application, which varies from cameras (small GoPro cameras to large cinema cameras to infrared cameras) to sensors (for example, for precision agriculture), to torches, sound devices, LIDAR remote sensing technology and so on.

“Aeronavics’ drones are designed and built to service the global commercial and industrial segment of the market,” says its general manager and director, Linda Bulk. “The systems are robust and reliable, backed by a high level of service and advice.”

The company is now raising capital through the Snowball Effect equity crowdfunding platform in order to fund the completion of their new product line, to scale up production, sales and marketing, and to roll out an international distribution and service centre network.

They hope to raise at least $750,000, capped at $1.5 million, which at the higher end will represent a 15 per cent share in the company.

Going down the relatively new equity crowdfunding route has been a bit of a brave step for Aeronavics, as it requires a very public exposure of most aspects of the company's finances, activities, plans and dreams.

“It’s a great opportunity for many people to join in on what is not only a good chance of financial yield, but is also something really interesting and meaningful. This technology does and will do a lot of good in the world,” says Bulk.

“We'd thought about going down some traditional investment funding routes, but when the Snowball Effect contacted us and showed how it also linked into angel investors, we decided this was the best capital raising approach for us for this first funding round.”

Research and development has been, and still is, very much a part of its culture. Bulk says the introduction of RPAS (remotely piloted aircraft systems) disruptive technology has for Aeronavics been a push/pull approach. The push is the ongoing release of improved drones with their enhanced capabilities to inspire further application; the pull being the response to clients' particular needs and requests.

Bulk says that at present they have not pursued patents for their existing product line because it has not been worthwhile to do so.

“We’re not easy to copy – there are significant manufacturing hurdles one must overcome in order to replicate our drones, so proprietary elements (both method of manufacture and product) have best been kept as trade secrets.

“Our protection is in staying ahead of the competition with our continued developments and advancements,” she says.

“Besides, we're offering not just a product, but backup, support, education and service. This is hugely important in this market segment – and this is where we also excel.

Bulk says Callaghan Innovation's funding support for a particular project helped put it in the spotlight and win an industry award, while its establishment of an industry-wide drone association has also been invaluable.

Aeronavics intends, as outlined in the information memorandum through the Snowball Effect, to become a $50–$100 million dollar a year company over the next five to seven years.

“But our numbers are very conservative, and we look forward to outshining those predictions,” says Bulk.

In this particular case, it would definitely appear that the sky is the limit.

Find out more about the Snowball Equity crowdfunding platform.

Since this interview, Aeronavics broke records to raise their funding cap of $1.5m in only six days, congratulations!

Updated: 4 September 2015