SkySpecs, the Ann Arbor-based drone startup, announced this week that it raised $3 million in a Series A round. Venture Investors led the investment, with participation from Huron River Ventures, Amherst Fund II, the Michigan Angel Fund, and Invest Michigan. To date, the company has raised a total of $4.3 million, said SkySpecs CEO Danny Ellis.
“We are excited,” Ellis said. “Our team is looking forward to getting the technology in the field—that’s pretty exciting after working on it for so long in the lab.”
The investment caps a busy, high-growth year for the startup. One year ago this month, SkySpecs was the $500,000 grand-prize winner at the Accelerate Michigan Innovation Competition. Two weeks before winning Accelerate Michigan, SkySpecs headed east for a four-month stint in the Techstars New York accelerator.
“The mentorship at Techstars was incredible,” Ellis added. “Being plugged into their network is incredible. We were a team of engineers, so we didn’t have experience with business strategy or building a brand.”
Ellis said SkySpecs’ patent-pending collision-avoidance technology has the ability to “lock-on” and maintain a specified distance from a target object, increasing safety and reducing the need for costly human operator training. SkySpecs is working directly with commercial customers to launch its automated drone inspection service in early 2016.
Founded in 2012, SkySpecs initially aimed to make autonomous drones easy to use for non-pilots. “We made the software generic enough to work on any drone and added sensors so the drones could see the outside world,” Ellis said. “Then we realized collision avoidance was where we could make a real impact. We made the decision to focus on inspection and operate as a drone-as-a-service company.”
That decision also helped investors warm to SkySpecs. Federal regulators still haven’t established the rules that will govern commercial drone operators, and that uncertainty contributed to the reluctance of early backers, Ellis said. As of now, SkySpecs has been granted an exemption from the ban on drones, which means the company is cleared to fly commercially if it abides by the FAA’s strict interim rules.
“It’s very exciting because it means there’s a light at the end of the tunnel,” Ellis said. “Three years ago, there was no light. Investors were very shy about backing an essentially illegal business in the U.S.”
SkySpecs has also entered into a partnership with San Diego’s UpWind Solutions, a provider of operations and maintenance services for utility-scale wind-energy projects. UpWind uses SkySpecs’ collision-avoidance technology as it inspects and maintains wind turbines. Ellis said his company wants to perfect its software and hardware technology in the wind sector before it scales to other potential markets such as cell towers, mines, power transmission towers, and bridges.
SkySpecs, which has an office in downtown Ann Arbor, plans to use the money from the Series A to expand overseas and double the current team of eight employees as it waits for the FAA to finalize commercial drone regulations.
“The ruling on small drones is supposed to happen in June,” Ellis said. “It should really clarify what people can do commercially with drones that weigh less than 55 pounds. Then, after that, I think we’ll see the market explode.”
