Its enterprise drone is fit for construction, mining, and insurance companies, but the question is whether companies already catering to those audiences and adding drone capabilities will win out over this well-funded newcomer.
In June 2016, drone manufacturer Kespry announced the close of a $16 million Series B equity financing round. It included investments from DCM Ventures and Lightspeed Venture Partners and follows the company’s initial $10 million Series A round in October 2014. The company has been on a solid march of advancement that includes a partnership with chip manufacturer NVIDIA and — according to investor John Vrionis — has “100 customers, millions in revenue, and several dozen field units in production.” By Silicon Valley standards, Kespry’s Founder & CEO Paul Doersch is a rising star. He has successfully assembled an R&D team with expertise in a variety of areas, including computer science, mechanical engineering, aerospace, and electrical engineering with specialties in robotics, computer vision, and data visualization.
WHAT’S COOL AND WHAT’S NOT:
It’s impressive that Kespry has been able to acquire so many customers and secure a revenue stream in such a short period of time. Their solution has only been in
It’s impressive that Kespry has been able to acquire so many customers and secure a revenue stream in such a short period of time. Their solution has only been in market about year. Their current focus is on acquiring customers within the aggregates, construction, and inspection industries, which is a shift away from their initial focus on precision agriculture. We think this was a smart move. We have written about the challenges of the precision agriculture market for years (most recently here) and we also extol the virtues of better opportunities in The Truth about Drones in Construction and Infrastructure Inspection.
Kespry gets what a lot of drone manufactures are only starting to realize, and this that enterprise customers buy full end-to-end solutions — not products. To that end, you can’t just go out and buy a Kespry drone outright. The drone is bundled with a cloud solution that provides data processing and reporting with secure online storage. There is no standard remote control device for the drone. Everything operates via a mobile tablet. This keeps the user interface simple and the customer learning curve short.
The cloud solution is nothing exceptional. It does what most drone and top construction and inspection data services do. For instance, it allows users to measure cut and fill volumes, distances, areas, and perimeters; overlay PDFs and drawings on their maps; make annotations for collaboration; and view contours, elevation maps, 3D models, and more.
However, what’s exceptional has yet to be fully developed. Kespry’s collaboration with NVIDIA centers on the Jetson TX1, a credit-card-sized module machine learning device. Kespry has integrated it on a prototype drone and used it to automatically track and identify construction vehicles in real-time. This video shows that demo. While they are still developing this new capability, there is the possibility Kespry stands poised to do what other drones solution providers have yet to do, which is offer live asset monitoring and logistics optimization.
On the surface Kespry’s quadcopter drone looks like any other. And even at second glance it’s hard to differentiate its current technology from other vendors that provide drones for the same markets and industries they serve. Brands like Leica Geosystems, Lockheed-Martin, Riegl, Trimble, and Topcon are much better known among aggregates and construction companies.
Outside of those brands are a host of other start-up drone manufactures that all are vying for the same set of customers. These include names like 3DR, Altavian, Aerialtronics, Aeryon Labs, Ascending Technologies, Draganfly, MicroDrones, and senseFly – some of whom are building solutions via strategic partnerships like this one between 3DR and well-known brand Autodesk.
Kespry has a two-part challenge, and it must face both at the same time. Its first challenge is to acquire new customers for its existing drone solution in a crowded market. For the brands well known in the construction, mining, and insurance market (like Trimble and Topcon), this is not that difficult; they can simply start selling drone solutions to their existing customers. But Kespry is new brand for these customers. The second challenge is to ramp R&D and find applications and markets for their “machine learning” drone solution. Perhaps their new drone solution could prove to have such a competitive advantage that purchasing departments will be willing to risk a contract on a rising star.
One thing is for sure — investors will want to see a return, and in this Kespry will not be alone. In the coming year, we expect that drone-related companies will walk into prospects that have already been pitched by half a dozen companies. The challenge for all will be how to shift from R&D-based operations into well-branded sales organizations.
This post first appeared in DRONELIFE.com