Japan’s Drone Fund to invest up to $40 million in UAV ecosystem in India

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Japan’s Drone Fund to invest up to $40 million in UAV ecosystem in India
Japan’s Drone Fund to invest up to $40 million in UAV ecosystem in India

The Drone Fund has tied up with drone major Aerodyne India group to invest in the latter’s manufacturing facilities and also to select other local firms

One of the world’s largest dedicated VCs for promoting unmanned aerial vehicle (UAV) ecosystem, Japan-based $170 million Drone Fund (DF) intends to invest up to $40 million in Indian companies working in the sector.

The Drone Fund has tied up with drone major Aerodyne India group to invest in the latter’s manufacturing facilities and also to select other local firms.

“We are the world’s largest dedicated fund to promote drones. A few years ago we were looking at China in a big way. We conducted surveys there and wanted to partner with companies there. But things have changed. We wish to fund develop a large drone ecosystem in India to be able to create an alternate market for sourcing of drone components here. Our joint venture partnership with Arjun Aggarwal, MD of Aerodyne India, is to promote make in India,” Soki Ohmae, co-founder and managing partner of Drone Fund.

There have been serious data security concerns over Chinese drone majors having their servers back home. For instance, last year the US had imposed restrictions on Chinese major DJI and some other companies from there. Indian UAV firms have landed in a sweet spot because of this. Japan’s largest sectoral player, ACSL, has tied up with Aggarwal’s Aerodyne. Japan will also see an increased use of drones and is looking at made-in-India UAVs as a more secure option that the traditional source market.

“There is tremendous faith in Indian technology and trust in India. We are making in India for the world now and orders have started pouring in from Japan, Asia and the Gulf, among other places. There is a clear intent to eliminate the traditional drone supply chain (read from China),” Arjun Aggarwal told TOI. Aerodyne currently has a manufacturing unit in Tamil Nadu and will shortly open at least two more in other parts of India. “We are now setting up our own battery manufacturing unit in India to tackle the issue of battery shortage faced by the drone industry and ramp up manufacturing,” Aggarwal said.

Ohmae said: “We are a VC looking at investing 25 per cent of our fund in companies abroad. India has a great potential to make for the world. We are willing to provide both the funding, the deep technology required for the purpose and are speaking to many people in India.”

To invest in agro drones to increase croppage through scientific methods that drones can help enable is one of the Drone Fund’s primary focuses. “It is just unhealthy for a person to be spraying pesticides in the field. This work can be done by drones UAVs can and will revolutionise agriculture,” he said. Similarly, high altitude and heavy lift payload-carrying drones will be the other area.

While drone are being seen as the next big change-maker similar to the changes ushered in by mobile phones and then internet in the not so distant past, there’s one big difference. “They were B2C (business to customer) businesses while UAVs are primarily B2B.”

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