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The drone ride from 3 Idiots to IPO | ideaForge
Do you remember the drone scene in the movie “3 Idiots”?
That drone was built by a relatively unknown company at that time called ideaForge.
Now, if you're into stock markets, you probably know that ideaForge is no longer an unknown company. In fact, it’s just pulled off the most successful public listing of the last 2 years.
However, IdeaForge didn't become successful overnight. It took them 16 years of relentless effort and determination.
Ankit Mehta and his friends started IdeaForge right after college, and they faced many challenges for eight long years before they finally secured their first big funding.
Their perseverance paid off, and ideaForge emerged as a market leader in the Indian unmanned aircraft systems market.
They also achieved a remarkable 7th position globally in the dual-use category (civil and defence) drone manufacturers.
In our conversation, Ankit talks about his amazing journey of ideaForge and the evolution of the drone industry in India.
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Ankit: Hi everyone I'm Ankit, co-founder and CEO ideaForge.
Actually what happened was that I was looking to start-up pretty much straight out of college because I did not sit for the campus placements. I also did not apply outside for any further studies or anything like that. I pretty much intended to start right off the bat and I was speaking to a few people, but the terms at which I was likely to raise capital did not seem right to me at that time. It was very early.
Akshay: What were you pitching? What was the idea? Did you had a product in mind?
Ankit: I had filed a patent on a novel energy storage device, which was essentially storing mechanical energy in a way that you can accumulate it and then release it later. You can take energy from any disparate random source, but you can accumulate it in a reservoir of energy and then you can release that energy in a more controlled and more smoother fashion to a device that can generate energy based off that.
So that was one of the patents that I had filed. And based off that patent, we actually wanted to start a business to build these portable chargers that could charge mobile phones. Around that time, mobile phones had just started penetrating the rural parts of the country and there were so many news items where you would see people charging mobile phones directly from lead-acid batteries.
Some people would be paying money to get their mobiles charged at various retail stores and kirana stores. So essentially it was those days and we felt that maybe if we give them a means of sustaining this device, the usage will go up and we built our first hand crank charger at that time, which could simultaneously sustain calls as well. If you got a call, then you could speak on your phone and keep charging the device. Then we had built a few innovative products around it as well, but the initial idea was that to work on alternative energy and that's how it started.
We ended up in a situation where I did not had any other backup at that time to sustain. For me it's been very clear from day one that you pursue the path of your heart's desire till the time you can survive. If you can't survive, then you take a temporary detour and come back.
My co-founding team, the technical team was still graduating, so I really did not had too much of a choice as well. I got an off-campus placement and worked for 6 months, particularly trying to earn as much as I could to help me survive the next 6 comfortably. So I was happy.
We started writing our business plan and in 2007 we registered the company. We got some initial funding as an individual through a program called Technopreneur promotion programme of the Government of India. That was the initial seed capital that went into making our first charges. Then when we got incubated, we got some additional funding through our incubation centre.
Akshay: Where did you get incubated?
Ankit: We got incubated at IIT Bombay. So that's how it started. We started with the Chargers project, but we were also doing these sustenance projects on the side. While that was the main product, we always knew that we are not going to be building a company purely looking at alternative energy and that's the reason why we came up with the name ideaForge because we didn't really wanted to box ourselves into saying alternative energy or robotics. But we were always excited about mobile robotics, so most of our body of work was around either energy devices or mobile robotics, including the first prototype drone that we had built in 2004.
Since then, we've been working with this tech. Because we were already doing this, IIT Bombay Aerospace department worked with us to further build on that technology and the efforts that we had built, and we made some data loggers for them and we ensured that we are able to help automate those kind of operations.
In 2008, there was this competition where alongside the MIT US and many colleges from the rest of the world, we competed in a competition called MAV2008, which was jointly held by the Department of Defence US and the Indian Army. In that competition, we helped IIT Bombay secure the pole position alongside MIT US.
Then because of that there was a lot of acknowledgement that there is a company or a team in India that can actually build these kind of technologies from scratch, because at that time there were very few sources of getting you autopilots from. There was one German company that we were aware of and those guys were expensive. It was hard for people to integrate if they do not have first principle understanding of what it takes to do this.
We ended up becoming attractive for a lot of DRD labs to deliver our tech to them for their programs. Lot of our autopilots, that were the brains of the drone that actually governs how the drone will go from location A to B that you pointed for it to go to, we actually did a lot of work with DRDO in the initial days. We supplied a lot of our autopilots there. In fact in 2009, we launched the world's smallest and lightest autopilot of that time, would be almost half the weight of the nearest competitor and would be able to control more types of devices than what the other autopilot used to be able to do.
Akshay: This autopilot that you were supplying was it like a CPU in a way? Like it had a chip, a power source, and some embedded software.
Ankit: It's a computing device that has all the sensors on board that are required for the drone to understand its state and understand where it is in reference to the world and then take decisions according to its health, its state and continuously keep it flying and operating at a minimum benchmark.
Akshay: So it would have like a gyroscope and a GPS. And the DRDO was looking to deploy this for say- if you are having a conflict in the desert or in the mountains, then you have extra eyes.
Ankit: Yes. The promise of drones existed and particularly small drones existed even at that time. But usually people were looking at drones which were fixed wing drones. Even DRDOs had a lot of programs and projects around fixed wing drones where you could throw them with your hand and have them do a mission with a camera on board and then come back and land and be comfortably retrieved.
Akshay: And how does it fly then? Does it have a propeller?
Ankit: If you're aware of radio control flying, a lot of people do hobby flying. You can think of this as an evolved version of hobby flying where you are no longer flying the aircraft. You are merely giving it the direction to go from point A to B doing certain launch events. But in radio control flying, you are supposed to do the full manipulation of the system. In this scenario, you are essentially doing nothing. You're just telling it to go from point A to B and it'll automatically figure a way out of going there. So the entire software and the hardware that does that real time control of that aircraft, acts as its brain- is what an autopilot typically is.
Akshay: And the goal would be at point B to capture some images and then come back and those images could be transferred from them.
Ankit: Usually those images are live transmitted.
Akshay: You were supplying your autopilot boxes to the DRDO in 2009, then what?
Ankit: Essentially in 2008, you had the terror attacks on Mumbai and when those terror attacks were happening, we realized that we essentially were not able to help despite having the technology. When the Naval helicopters were trying to look at the third and fourth floor of The Taj Hotel, we felt that we have missed an opportunity to serve the nation and instead of putting more people in the harm's way by obviously trying to do that, a drone could have done a much better job by staying out of earshot and still be able to see and be not very visible.
That's when we decided that maybe the best use of our tech is to build it for our forces so that they can deploy them for such situations, particularly in the last mile where such large assets cannot really help you. So that was the thought process and that's how we decided that we'd convert these into a product and in 2009, we launched India's first fully autonomous pure VTOL Micro UAV.
Akshay: Just break it down, what is VTOL?
Ankit: VTOL is vertical take-off and landing.
Akshay: And then you said Micro UAV.
Ankit: Micro essentially is meant for a, you can say backpackable UAV.
Akshay: And UAV is unmanned ariel vehicle.
What was this product like? What were the use cases for it and what all sensors did it have on board? What did you price it at?
Ankit: It had a camera sensor on board. It had two camera sensors. One could work in the day and the other could work in the night as well. Because the drone is autonomously flying, you just have to give it location and you just have to ensure that the takeoff location is not covered with things overhead and is a reasonably clear space to account for the accuracy of the sensors. But as long as those things were taken care of, the system would autonomously take off, continuously beam live video from that location and offer the ability to do dynamic control of the system. So if you want the system to move a little bit left, right, go to another location, all of that was possible using the system that we had built.
Akshay: So this is the kind of stuff in Hollywood movies where they show them targeting terrorists in Iraq and stuff like that.
Ankit: That is happening on much bigger systems. They're still drones, but they are much larger ones that need a runway to take off and land. What we build are drones that somebody can carry in a large backpack and deploy them at the last mile.
Akshay: You were selling this to defence organizations?
Ankit: Yes. Mainly we started by selling to our police forces and that subsequently went on to be used for beyond that as well.
Akshay: Who was doing sales? You sound like a bunch of technical people. Someone must have needed to learn how to do sales.
Ankit: Initially one of our other teammates, Amardeep Singh- he used to do marketing for us. He also was from IIT Bombay.
He used to do the sales and marketing work for us. In our case, the sales and marketing was primarily centred around the need for doing flight demonstrations of the system we had built. Because at that time it was really good enough for people to just see something flying because that wasn't such a commonplace site.
So most of our sales was just showing the system fly and getting live video and being able to see the aerial perspective or as we call it at times, the god's view of things. We used to have a lot of fun in the field showcasing the technology to our end users.
Akshay: But police departments had the budget for it. You didn't need to really sell in that traditional sense of convincing them to buy and all that. Essentially, they were already looking for this. You just had to show that your product is technically sound.
Ankit: The fact that it is available was a massive curiosity for everybody. Once they saw it flying, they obviously really liked what they saw and therefore were willing to carve out the necessary budgets to buy it. We also in the early days partnered with DRDO to launch our Netra drone. It was the first flagship drone that we had launched. And our Netra series is now in our fourth generation and it's been used in many cases to do counterinsurgency, counter terror or emergency response.
Now they're also used for mapping applications as well, where our drones are being deployed for creating land records for end users.
Akshay: Were you able to break even once you started selling this to the police department? What was the revenue like?
Ankit: So essentially what happened was that we started from a, you can say high volume, low margin, low tech product, which was the Chargers business that we were doing, from that to moving towards the low volume but higher margin and higher mix product. We were very conscious that we will have to make money of our own, because by then also one thing I had realized was that it was very unlikely to get funding for hardware projects, particularly if you wanted to get value from the deal.
We always were very clear that we have to build a product that the customer wants to buy, can use effectively, and we can make money from it so that we can build the next one or the next one after that. Not just build it for the customer but also invest in technology so that we can continuously improve what we are building.
So that consciousness was there in us and therefore we were quite appropriate in terms of how we price it. It was commensurate to what it would've taken to survive in those times.
Akshay: What kind of annual revenue were you doing in those years?
Ankit: I think about a crore or so, or maybe 3 crores.
Akshay: 2015 is when you got a reasonably good sized seat funding round. How did that come about?
Ankit: Our story has been, and I say this very often these days that, as far as funding is concerned in every event, we were like tiger out of his cage in a zoo because people come to the zoo to watch the tiger, but if he is out of his cage, nobody wants to go near him. So that's who we are.
And its very challenging to get funding for these kind of ideas and problem was that it was just the times. Those times were all about software. So nobody really understood in the venture world what it takes to build a hardware company.
It was what it was and even when you would get funding offers, they would not sound right. After having spent enough years in doing this, we knew that if we can't be valued right then there is very little merit in getting into that partnership. It's only going to be a win for one side and it's not going to be a win-win for both of us.
That ways we were very conscious, so we had to prove the business model every step of the way before we got funding. 2015 we got funding because we had won the country's first capital procurement, which usually the Army, Navy, Air Force headquarters do from the Air Force to give them mini-UAV drones for some of their forces.
That contract when we signed was sizable, therefore because of that, people felt that- no, it seems like a business can be built here as well and that's how interest came to us. And because a lot of the capital was visibly going to go into execution of that contract itself, we had the good fortune of being able to raise some capital in 2015.
That was all you can say, quasi pre-series A kind of funding that we got.
Akshay: How big was that contract? The capital from Air Force?
Ankit: Cumulative value at that time was close to between 5 to 7 million dollars. So it was a dollar value at that time. It was the largest at that time. So that was the journey there.
Akshay: And who was doing fundraise? That's also like doing sales in a way. You have to do networking and get a chance to meet people and pitch and all that. How did you manage that?
Ankit: I used to do it mostly. What happened was that after the initial days it was very difficult to even attend events where we would go and pitch because any industry event that would happen was essentially an event where mainly people were looking at IT products.
So even if we would go and we have had events where people got up and said that I have goosebumps listening to a two-minute story that I would've shared about what we were doing with this technology here. But we would never get funding.
So that used to be the case. It was hard to network also because the ecosystem was exhausted to that extent. Everyone knew who wanted to know, but there wasn't enough there in the private side of the house to be able to get, so we had to survive. But then we did find- after we went through a few milestones of proving that a larger business is possible here, then slowly and slowly things started to turn around and get a little bit more aligned in that direction.
Akshay: Who was heading the R&D and product development? I guess like maximum amount of money would be going into that.
Ankit: Absolutely. It's a very famous story in our company wherein we were on our last 20,000 rupees that we had for discretionary spending.
Akshay: This is 2015.
Ankit: Even before that probably. We've been through near death so many times that it's not even funny. That was our reality for the most part of our entrepreneurial journey. We had to take a call between getting a new water cooler or getting four new motors to experiment a new type of aircraft or something like that.
And I don't think anybody, irrespective of who was managing finances, ever took the decision that we'll get the cooler but not the motors. So that was our reality. Essentially, anything we could spare would go to development.
We were very clear that in the absence of being able to raise on the business or on the idea, the only thing that will increase the intrinsic value of the business is the technology it has and its technology cannot suffer for the want of capital. Therefore you have to earn enough so that you can invest behind technology. And that's the reason why we had a reasonably bootstrapped business for the longest while.
Akshay: As founders, you must have been taking home very little money, if at all. There must have been months when you won't have been able to pay yourself.
Ankit: Mostly barely subsisting.
Akshay: Did 2015 event change that, you had a big potential contract and you also got some amount of funding?
Ankit: To be honest, we are very clear that orders and funding are both great events to celebrate. But they are not the goal of what we are doing. And that recognition has always been there with us because we've seen times irrespective. The only thing that matters to us as founders in most cases is that what we have delivered to the world, is it adding value to the world or not.
That is the only thing nobody can take away from us. What the product has done for the society or for the customers who have used it- it's something nobody can take away. But everything else is extremely ephemeral and momentary. It's a privilege to get funded, to have enough resources that you can chase behind your dreams a little bit faster. But they are by no means events to consider yourself as having a ride because these events come with a lot of responsibility as well, including getting a customer order is the same. Unless you deliver and he or she uses the product and gets the benefit from the product, your job is not done or you have not arrived. The day the product is doing its job is the day you arrived. That's our worldview of things.
Akshay: Tell me that journey 2015 onwards once you got that big contract and subsequent to that, what happened?
Ankit: We got the big contract. We got a few follow-on contracts as well, and we were cruising along really well. In 2016 we signed our series A investment and in 2017 we closed it as well.
Akshay: That was about $10 million.
Ankit: You used to need foreign investment approvals at that time so we were the first drone company to get institutional investment in the country. And we were packed even then by Infosys, Qualcomm and Celesta Capital. Celesta is a fund- their founders have been investing in tech companies for a very long while, and their own background is of building tech technology companies to very high and large revenues.
We had the good fortune of finally meeting people who understood what it takes to build a hardware business and that's the reason why they backed us. Then because they backed us and we had a bunch of additional interests from others and that ended up creating a good cycle for us.
That was a good moment. But at the same time, the environment had become a little tricky because the regulations for drones had started to loom large. The 2014 note had banned private use of drones. Then subsequently the new rules were to come out and those rules in the draft that were coming out were a little bit more challenging than one would have to have.
Then finally in 2018 when the rules came out, everyone knows that they were quite difficult to implement, but not probably because they were difficult to implement technically, but more because they did not envisage any gap between a government system being ready and the enforcement on the rule.
What the government could have done- they could have used it a little bit differently but their hardline stance that everything will happen through the system ended up creating a little bit of a log jam at that time. And for a couple of years, the industry was drifting along on the margins.
Akshay: For an outsider who's not from this industry what was the problem with these rules? Why did it crash the growth of that industry?
Ankit: These rules essentially banned the use of drones by any civil user without having software piece that needed permission from the central government to deploy.
So it's needing ATC permissions from the airport authority every time you fly. Now that permission for an industry like this, if it has to come manually, or if it has to come physically or if it has to come through automated system, the system has to be ready. But there was no system ready for that.
Till the system is not ready, you do something to keep the gaadi moving. But that was not adopted as a measure and we waited for the system to go live very fast. In the end, even after I think two years, we were nowhere close to the finish line on that. So that is where things were a little tricky because what was promised as readiness could not have been achieved considering a government system and a government this one, it could not have been achieved.
So probably at that time that became a challenge. But now that's all in the past because, come pandemic everyone realized that we'll be losing more lives by not using drones, then we will lose by using them. The fears were broken. Suddenly what was good to have, became must have.
Drones did pretty much everything during the pandemic. From spraying the streets to us deploying drones with megaphones on them or doing lockdown surveillance and all sorts of activities based on the knowledge of that time that all of us were carrying.
We've done so many things which were in that direction. So essentially the pandemic and those events subsequent to that, changed the colour of the industry. We are now on a cruising path, exponential growth path in terms of the industry itself is concerned.
Akshay: This restriction, the new law which came in, it hit private demand for drones but your demand was largely government like Police force, Air force.
Ankit: The way some of the government demand works is that they were at that time testing these systems. So if they have inducted in a reasonable number initially, then they want to assimilate, operationalize, then more demand will come in. So some of that was in that direction and things were happening there. That's the reason why whatever numbers happened, even those happened because there was some demand there. Generally, the growth or the exponential growth doesn't come purely from some of these kinds of customers. Presently it is also because of the environment we are in, but in general you expect enterprise and private side to grow much faster.
And that's the reason why it was an important part of operationalizing drones on a daily basis in our lives. That did not happen for many years. It was under restrictions and even if the rules were not half big, the preparation to implement them was heartbreak. That ended up creating a lot of trouble.
Akshay: Help me understand the private demand for drones. What kind of bodies or what kind of customers are buying drones? What are they using it for?
Ankit: They're being used in mines, for doing volumetric estimations, haul road mapping, all sorts of activities in mines, cut fill estimates, waste estimates. They're used in agriculture for spraying. They're used in precision agriculture wherein you can judge the health of a crop progressively and if a specific area is not perfect, then you can do interventions in those specific areas and improve the quality of output as well as maintain or increase the yield overall on that farm.
So essentially agriculture is another large use, plus power line inspections, inspection of transmission towers, inspections of mobile towers- all sorts of use cases. Presently, the government is using drones for creating Land records- drones are taking high resolution images and then they're being converted into maps, which are very accurately geo referenced and property cards are being created with the reference of the same.
Akshay: What changed when pandemic hit you? You said that
Ankit: Once the mindset changed, that suddenly from what was banned was enabled through special exemptions. Then the locust swarms came in. People thought that drones could be used for helping spray insecticides for locust to prevent the spread. They used drones for that. Then the Svamitva Scheme, which I was talking about where the Government of India is mapping all the 660,000 villages in the country and is planning to create property cards and distribute them to villagers who will get ownership of their land for the first time. That is what is happening on that scheme. So that was launched by the Honourable Prime Minister.
Then we had the Galwan incident where the main reason why we got into that issue was because there was no information of what was happening at the border. Because that information was not available, we ended up getting into a tricky situation.
That triggered emergency procurement from the government side where they wanted to induct technologies that would help them keep eyes on the border or better manage those situations and those kinds of escalations. Then the war happened between Armenia and Azerbaijan wherein Azerbaijan was able to completely outgun Armenia purely on the basis of what drones did in that environment.
So you had a flurry of things that happened, which forced the government to not just open up private use for these kind of scenarios but accelerated the need to enabling regulations as well as the defence side of the house also realized that unless they invest behind this technology, there is a fear that the next country that does not have drone power could be the next Armenia as well.
In that broad sense the entire outlook towards the industry changed in a short span of nine months. We had a new set of rules that came out in 2021 and since then we've opened up our airspace in a big way to allow this technology to flourish in our countries as well. In fact, now it is a stated mandate of India- to want to become the drone hub of the world.
Akshay: What are these new rules which came out in 2021? Now you no longer need approval for every flight?
Ankit: As long as you are operating a type certified drone in a green zone, which is 85 to 90% of the country, up to 400 feet you don't need anyone's permission. It has become quite equivalent to flying or taking a car out on the road.
You need a street legal car, you need a license plate, and you need a driving license. For drones you need a type certified drone with a pilot certificate and a unique identification number, which is called UIN. And you are free to fly the drone up to 400 feet in green zones in the country. Anything above 400 feet, unless it is declared as a red zone, is a yellow zone and if something is declared as a red zone, then you need central government's permission to operate in those areas. These are typically areas around airports or certain critical installations and stuff like that.
Akshay: How did your customer base evolve? You were mostly doing government sales then once Covid hit how did your customer base evolve?
How did your sales cycle and sales organization evolve?
Ankit: The pandemic did not really change the target customer segment per se. It only accelerated some users and certain other users were getting explored faster than the ones you would've thought will get explored earlier. With Svamitva, mapping became a rage and suddenly mapping has become a real thing.
Now nobody wants to look at mapping in the conventional sense, in the sense that the whole age-old method of doing mapping with only Total Stations and those kind of things is done for. Now people are looking at mapping using drones primarily, as far as land survey mapping is concerned.
Similarly, asset inspections is becoming real. Security and use of drones for security situations has become real. So broadly it has just reinforced. Some other use cases have come to the fore, like spraying has come to the fore in a big way. Spraying using drones is something that a lot of people are looking to explore.
I would say that customer base hasn't changed. It's just that deployment across the entire base has actually now accelerated.
Akshay: Mapping customer is still the government only. But I guess for asset inspection, for spraying, these would be private customers.
Ankit: There are private needs for mapping as well, for project planning, project progress monitoring many kind of use cases even on the private side of the house.
Akshay: As an organization, what kind of revenues were you doing? And I guess you also raised more funding after that.
Ankit: Yes, we did. So when the pandemic started, things were a little touch and go. It was probably the lowest point for the industry in many years because regulations were really not letting anything flourish. And when pandemic happened, things started opening up and things started looking well on the upswing as well and then we had Svamitva programs come in. We were the first drone company in India to get their drones certified or qualified for the Svamitva use by the survey of India.
Our drones started getting deployed for the Svamitva scheme. That progressively started to build the order book and now over the last two fiscals, not including the current one, we've grown like 10x. That's been a good jump in terms of how things panned out.
Akshay: 10x is amazing. I guess you also raised about 17-18 million dollars in the last two years.
Ankit: Last we had raised in 2017 and we were always frugal about how we spend and where we spend. And that ended up helping us sustain this challenging period.
But the moment things got back on track. We got quite a good flurry of orders under the emergency procurement from the Government of India, also for the Svamitva scheme. That ended up creating a good momentum where we were able to raise funds from our existing investors as well as we had Florintree, Exim Bank. And some of our existing investors joined into our series B round.
Akshay: Almost 20 million, I guess your Series B. And what's your current ARR? Or this year, what are you expecting to close revenue wise?
Ankit: That I can't disclose, but it's going to be healthier than last year.
Akshay: Have you crossed 10 million ARR?
Ankit: Yeah. Long back.
Akshay: So you're now touching or going towards 50 million kind of a target, I'm guessing then?
Ankit: Not necessarily yet, but yes. We are on our way.
Akshay: I want to understand drones versus satellites because in a lot of these use cases satellites are also being used for it.
What is the difference between let's say mapping or inspecting crops? I do believe that there are these satellite images on which machine learning algorithms can be used to do a lot of these similar use cases. So help me understand where drone fits in better or where satellite fits in better or the differences between the two.
Ankit: Drones are very different. You can say technology as compared to satellites, because drones, particularly of the class that we make, can be numerous in numbers trying to map the same patch of land. So imagine how many satellites can you have up in the air versus how many drones can you have deployed to map that same patch of land.
It is also needless to say that the resolution at which you can map using a drone and the fidelity that you get in terms of data is almost 10x better than what satellites can do, even at the best resolution today. So you'll get 10x better data quality, you will get far better availability of data in that one sense because if you want real time data you cannot have one large sensor map the entire earth.
So it's the same problem with looking at very large drones. Ultimately, if you want to resolve the same object on ground, then the drone is going to look at the same patch of land and is going to deliver footage for that little patch of the ground only. And the context is, that has to be done a thousand kilometres away from the takeoff location, then it is all good.
Then you need a larger system that can go 1000 kilometers away and then give you data of that one small spot or even for a satellite it's pretty much similar if you want real-time intelligence. One, there is no substitute for real time intelligence, but to have a device there. You can't have one satellite look at one patch and then manage an entire battlefield or a battlefront or any other real time data that's spread over a wide set of area.
So essentially, a lot of differences from that point of view. Even that larger drone, if you don't have to go 1000 kilometers and you have to see something 10 kilometers away, then that 1000 kilometer drone is an overkill for that patch of ground. You would rather deploy a small drone that can go 10 kilometers and get the job done.
It's almost like you always can drink dal from a ladle, but maybe for an elephant you need a bucket, for a human you need a tablespoon. So it's something very similar in that one sense. Satellites are great and they have very specific tasks which they can do really well which is to cover very large areas but the temporal feedback and availability of that data, it cannot be as heavy a number as what you can get using a drone. Sometimes clouds can obstruct the view of satellites, particularly if they're doing regular colour image and stuff like that. Whereas most of the small drones operate below cloud cover so you can get that much better data in those times.
Akshay: What is the cutting edge in drone technology? For people who are not from this space, help them understand what all can a drone do today? What all features does it have? For example, everyone knows what is cutting edge mobile phone, like it has a great camera or it has full day battery life.
So what's like cutting-edge drone technology?
Ankit: This will depend on who you speak to. For example, for ideaForge cutting edge implies, performance, reliability and autonomy. As much as the product can deliver better performance, can deliver more reliable operations, can sustain heavy duty cycles of operations and can be autonomous, which implies that it can help deploy the least expensive resource in operations and probably the more needy one for a job as well- then you are doing justice to your customers by giving him the lowest possible cost of ownership for what he is buying. We essentially look at these three parameters as our measure of what's cutting edge. We do believe that we have leadership in some of our product categories in that area globally.
Akshay: What do you mean when you say deploy lowest cost assets? Your system is essentially controlling a cluster of drones and you're able to decide which drone should be deployed for which objective? Is it like that?
Ankit: No. What I mean by that is the following: - for example, if you want to map a very large area then what do you need?
You need a drone that can map as much as possible a chunk of that area every flight while retaining the need for accuracy and everything. Two, it should be able to sustain repeat use, because if it can only cover X amount of area in a given time or in a given flight, then you should be able to fly it many times because you can't expect these systems to remain airborne all the time.
All systems that have to take off from the roadside, be deployed to map an area which is completely unstructured and has to be carried on a bike or on foot or however- so they have to be lightweight as well. It'll obviously have limited time in the air, but how much more time can you pack for every pound that goes up in the air is essentially performance.
So you deliver that performance, plus you deliver the ability for the drone to do repeat of this performance or remain safe in tough environments or sometimes even be operable in tough environments. You can ensure that the user gets more life out of their system. You've given him or her more coverage per flight, and then you give him or her more number of flights also.
Now he has the lowest possible mix of cost per flight as far as amortization of his hardware is concerned, despite sometimes having a higher upfront cost of ownership. That is a very important factor. So his amortization on the hardware is the lowest and then if it is in a way automatic or if it is autonomous, you don't need a very smart person to operate it.
You need a medium skilled person to operate it, so you don't have to go for the most expensive resource in the market to deploy, but you need to go after the most sustainable resource to deploy. And therefore, as a combination of the cost of ownership, you end up creating the lowest cost of ownership for the customer despite being more expensive upfront and that's desirable because at scale, the cost of ownership is what matters. Upfront cost doesn't do anything if you have to replace the system many times by the time the job gets done or you have to maintain a large number of extra batteries or you have to maintain a lot of visual oversight onto the system and stuff like that.
So essentially these factors are what we believe are important and that's what defines cutting edge for us as far as this tech is concerned presently. And of course, the data that you get from the system has to be of adequate quality that allows for the inference the user wants to make from it. That is a given that has to happen. Otherwise it's of no use.
Akshay: Help me understand the software element in it. One part of your software is inside the drone which is helping it meet its objective whatever parameters are set, like to visit a patch of land, get images, and cover it and come back.
What else is there in the software that you built?
Ankit: There is the communication piece there wherein we make sure that the protocol that we use allows us to communicate with the drone, while the drone is giving you high quality imagery back in real time at a large enough distance that the user feels more freedom in his operation.
So that is one part, communication. The other part is the camera controls or the stabilization that goes onto the system or the camera itself, plus the control software that does both the job of helping you manage the drone in its flight, give it the necessary instructions for your mission.
At the same time, it also has sometimes features that allow it to do image processing on the data received in the real time, display it to the end user.
Akshay: I was reading recently that Russia is using Iranian drones in the Ukraine war. So how is it that an advanced military power like Russia is buying from Iran?
I was a little curious about that. If that is something which you would like to comment on.
Ankit: What happens in this technology- it's a very democratized technology in that one sense. Building a drone is not really an exclusive science anymore because open source softwares are available, autopilots are available, control softwares are available and there is enough that you can do with those to be able to at least rig up something well and progressively build in the right direction for it as well.
And also because the certification standards that one needs to comply for drones are in a way undefined because they are defined for mandated products or defined for consumer products, but not defined for something intermediate like what these guys are. So essentially, it's not very difficult to build a drone in terms of the initial stages and you can build quite reasonably sized systems in that direction.
However if you were to ask the question of, is that the best in the world? I'm quite certain the answer would come out to be, not necessarily. But is best in the world essential for a specific job- maybe in specific times it is not, in other times when you are not in such an emergency, it might be and therefore you would not rely on whatever is available.
Akshay: What is the future for the drone industry and where does ideaForge line in that? How big is this market likely to get? Do you have some stats on or how big the market is currently? What is it estimated to reach?
Ankit: Last year when the government announced the data for the PLI scheme, they mentioned that they received applications that added up to about 320 odd crores. That was including drone OEM and drone component manufacturers so that was the size of the industry. There are reports on the PLI scheme itself that state about its potential for growth in the subsequent year. It is definitely slated to grow at a very fast click in the short term.
And it is expected to grow and continue to grow all the way till 2030. For example, our own vision of being the drone hub of the world, if that has to mean something, then it is going to be a very large opportunity for the local industry as well.
Akshay: 320 crores- so this would be the total cost of production by drone companies, which are looking for the subsidy.
Ankit: Total revenue of the drone companies that were seeking the subsidy, the PLI subsidy.
Akshay: So the total market might be say 3 or 4 times of this number, including the non-subsidy business.
Ankit: Not necessarily because the threshold for applying for subsidy was only 2 crores. So it might not be as large because the threshold was fairly low in this particular case.
Akshay: Are you global? Do you supply to outside India?
Are you going global? What is your plan on that?
Ankit: Yes. Just in September this year, we took for the first time our systems to the US market. We are already delivering to some international markets like Oman and somewhere in Africa and even to some of our neighbours as well.
Akshay: What percentage of your drone is indigenously made? You must be importing; some parts must be made in India.
Ankit: As far as our drones are concerned, we've been able to indigenize. From a value perspective more than 70% of our system is indigenous.
It could be higher than that as well in terms of indigenization. We've pretty much built this technology from scratch and in a way, if you remember the movie 3 idiots and our early prototype in the movie, we've pioneered this space.
Akshay: Oh, that was your drone in 3 idiots?
Ankit: Yes. So this was a time where nothing open source was available. We built the entire tech stack ourselves and that's the reason why we have one of the most vertically integrated shop in this domain.
Akshay: What's your headcount now? How big are you as an organization?
Ankit: We are about 250 odd people on roll and another 200 odd people on contract side of the house for production. So directly employing close to 450 to 500 people.
Akshay: You produce in-house or you do third party manufacturing?
Ankit: We do a lot of third-party component manufacturing as well as subsystem assembly. But we do the system integration ourselves and we do the testing and delivery to the end customers at this point.
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