Drones get down to work

By 2020, the market for drones will be worth US$100 billion, says a Goldman Sachs report. When you take away the US$70 billion for military drones and US$17 billion for consumer gizmos, that leaves a still considerable US$13 billion market opportunity for commercial drones.

That means hard-working drones put to use on farms, forests, building sites, oil pipelines, movie sets, open-cast mines, and dozens of other scenarios.

Photo credit: 123RF

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Toru Tokushige saw this trend coming when he started Terra Drone in 2016. Wanting to create a business that combined web-connected gadgets with artificial intelligence, the Japan-based entrepreneur landed on the idea of commercial drones.

“While the hardware side of things already had several players competing with each other when Terra Drone was established, the software and service sectors still had a huge gap waiting to be filled,” Tokushige tells Tech in Asia.

That’s why his venture focuses on the software side, with systems designed for flight planning, synchronized flying, aerial LIDAR scanning, mapping, inspecting, and visualizing.

It’s up against other drone software startups such as Skyward and AirMap. But it’s not all soaring confidence in this niche, with last year’s shock shutdown of Airware – after raising US$118 million from investors – showing the risk of a startup getting ahead of market demand.

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Terra was designed to be global from day one, and now counts Japan, Indonesia, India, and Australia as its top markets. It expanded into Europe late last year with the acquisition of Dutch firm Skeye for an undisclosed sum.

In Japan and Indonesia, Terra’s services are used mainly in the construction industry. In India, it’s mostly for mapping and visualizing.

Toru Tokushige / Photo credit: DAVOS Tokyo

“Across Asia, we are witnessing good demand from sectors like oil and gas, electricity, mining, and energy,” adds a company spokesperson.

Now with 500 staffers across 20 offices around the world, Terra is profitable from its in-the-field drone services and software, though the startup won’t disclose revenue figures and customer numbers. It charges per project, with the option for clients to buy hardware from partners – such as drones, LIDAR, and various sensors.

The startup has not raised funding, but Tokushige might do so in future to support its ongoing expansion.

One of the latest experimental deployments of Terra’s software is at Japan’s Saitama Stadium, where drones patrol the skies above the 63,000-capacity arena, scanning for what the startup calls “suspicious persons.” Using a pair of drones – one at low altitude and another higher up – if one such shady individual is spotted by the higher-flying bot, the system alerts the lower-down drone to go in for a closer look.

The team counts industry giants Shell and Tata Steel among its major clients. Shell, for example, uses Terra to do visual aerial checks of its oil rigs for any wear-and-tear or damage, plus drones also do thermal inspections that look for heat loss, missing insulation, uneven burning or clogging of the rig’s flare tips.

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In the US, the construction and engineering sector is by far the largest private-sector use case for working drones – accounting for 35% of certified drone pilots, followed by logistics with 13%, according to a mid-2018 study. As is often the case with Southeast Asia, there are no reports or statistics. But differing topographies and economic activity will lead to different needs for airborne, all-seeing robots.

A drone inspects an offshore oil rig. / Photo credit: Terra Drone

“The Asian drone market is growing very fast,” says Tokushige. “Compared to other countries, the China market is more mature in terms of advanced applications. Japan has policies which are favoring replacing human-centric technologies with remote technologies like drones, and that has resulted in huge usage in the industrial sector. The use of drones among Southeast Asian countries is also increasing every year. And with India working on making the regulatory ecosystem more drone-friendly, there’s a huge potential waiting to be tapped there.”

Tokushige is happy that his drone systems have played a part in disaster relief work, such as in the aftermath of Indonesia’s 2018 earthquake and tsunami double disaster that killed 430 people and displaced 40,000.

In devastated Palu, on the island of Sulawesi, the startup worked with the Japan International Cooperation Agency – which has experience after Japan’s own dual catastrophe in 2011 – to create high-resolution maps of the landscape after the earthquake and tsunami. Those maps were needed urgently not just to aid in disaster relief around Palu, but also to establish ownership of the shifted land before new housing and infrastructure construction could begin. Terra’s LIDAR software could penetrate the dense vegetation in that rural area.

But, whether it’s a routine flight or a special mission, there’s one thing that holds back industrious drones: battery life. Tokushige calls it a “major restricting factor.”

In April, Terra invested in C-Astral Aerospace, a maker of notably long-lasting commercial drones. This gave the Japanese startup a hardware partner it can recommend to clients that need longer-lasting drones.

Tokushige also pointed out another barrier: restrictive regulations in various countries. He notes that they stem from fears about “the safety of their airspace – and rightly so.”

For now, these limitations prevent working drones from exceeding certain altitudes or geographic areas. They’re also hampering drones that could fly – to use the drone industry terminology – beyond visual line of sight.

Despite regulations and battery tech moving at a glacial pace, the Japanese entrepreneur sees industrial drones becoming more ubiquitous as they burst into new industrial applications.

“This is just the tip of the iceberg,” Tokushige says. “What is a drone? It’s just a device that can carry stuff and fly – so where is the limitation to its use?”