Saturday, April 20, 2024

Drones propel PrecisionHawk to $100M-plus backing

By David Ranii

PrecisionHawk CEO Michael Chasen
[/media-credit] PrecisionHawk CEO Michael Chasen was 25 when he co-founded Blackboard, an education-software company that was purchased by Providence Equity Partners for $1.7 billion in 2011.

Offering one-stop shopping for businesses that want to use drones for highly specialized tasks has propelled Raleigh-based PrecisionHawk to the forefront of a booming new industry. After raising $75 million from investors in January — boosting its total fundraising past $100 million — PrecisionHawk touts itself as “the world’s most well-capitalized” company focused on the commercial-drone market.

It’s also among the most ambitious: CEO Michael Chasen, 45, believes fast-growing demand plus the company’s leadership position can be a springboard to building a business with $1 billion in annual revenue. Chasen anticipates the money raised from investors can sustain the company until it becomes self-sufficient, though he doesn’t rule out seeking another round of capital.

PrecisionHawk’s strong suit is its diverse offerings, ranging from drones equipped with sensors that can inspect rooftops to detect hidden leaks to those that can determine what parts of wheat fields could benefit from more fertilizer or many other uses.

To be sure, residential-package delivery, which gets the most drone-related media attention, isn’t in the mix, says Thomas Haun, senior vice president.

All of the company’s offerings revolve around data collected by sensors attached to drones, both of which are sold by the 150-employee business. Other products include proprietary software that collects and analyzes the information and systems developed for navigation and automated flights. It also provides drone-operating services and data analysis.

PrecisionHawk neither makes nor brands the drones and sensors it sells and doesn’t disclose its revenue. Customers pay from $10,000 to more than $1 million for its products and services. Research and development is conducted in Raleigh; about half of the company’s employees are tech-oriented.

PrecisionHawk bolstered its capabilities in February by acquiring two companies that operate online marketplaces for licensed drone pilots for hire. Its network now includes more than 10,000 drone pilots in the U.S. and 5,000 abroad. “It’s almost like an Uber network, if you will, of drone pilots,” Chasen says.

Swiss agribusiness giant Syngenta uses PrecisionHawk’s technology to assess crop performance in field trials. Impressed with the results, the company’s venture-capital arm, Syngenta Ventures, invested in PrecisionHawk in January, along with Comcast and several other corporate giants.

The company “has bubbled to the top” of the nascent drone industry, aided by the depth of its offerings, says Katrin Burt, managing director of Syngenta Ventures. While most competitors sell one or two types of sensors, PrecisionHawk offers a dozen, Haun says.

Business and nonmilitary government spending on drones will total $13 billion between now and 2020, according to a Goldman Sachs forecast. That growth potential attracted Chasen, who previously was co-founder and CEO of education-software company Blackboard, which went public in 2004 and eventually employed more than 3,000 people. A private-equity group bought the Washington D.C.-based company for $1.7 billion in 2011. He then started a mapping software company that was acquired by Verizon in 2016.

Founded in 2010, PrecisionHawk’s fortunes took off in 2016 when it became the first company to obtain a Federal Aviation Administration waiver to fly drones for commercial operations beyond a pilot’s line of sight. Consequently, the company added 100 employees in 2017 and continues to hire.

Chasen joined PrecisionHawk in 2017, succeeding Bob Young, the co-founder of open-source software giant Red Hat, who remains chairman. Chasen has since added senior managers, including two former Blackboard colleagues: Lara Oerter is chief operating officer, while Brian Bharwani is senior vice president of finance. He says the growth potential of drones is comparable to the soaring demand for educational software that propelled Blackboard.

AkitaBox, a facilities-management software company based in Madison, Wis., offers its customers roof inspections via drones in partnership with PrecisionHawk. “It’s smarter. It’s safer. It’s faster. And it’s better,” says Josh Lowe, AkitaBox’s chief customer officer. “Now we’re just in education mode, educating (customers) to the true benefit of this.” He estimates roof inspections with a drone cost no more than one-tenth the price of sending someone up a ladder. The “holistic view” afforded by drones makes it easier to pinpoint the source of a leak, he says.

Today, PrecisionHawk focuses on the agricultural, construction, energy, insurance and government sectors, but Chasen expects the company’s capabilities will broaden. He’s confident one day, when you look out your window, it won’t be uncommon to see a drone flying by.

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