Cicada Innovations’ Portfolio company Propeller Aero has graduated from the incubator!
24 May 2017. Article by Tony Yoo. Originally posted in Business Insider Australia.
Drone technology startup Propeller Aerobotics has exited the deep tech incubator Cicada Innovations to move into its own facilities in Sydney.
“We’re now physically out. We’ve got a new office fitted out in Surry Hills,” Propeller co-founder Francis Vierboom told Business Insider.
“We’ve got 24 people full-time now and we were becoming a big jigsaw piece to keep moving around inside the building at Cicada – and [the head count] has doubled just in the past year.”
Helping the startup move out of the incubator was a $4.2 million series A capital raise last July led by California’s Costanoa Ventures, with contributions from Accel Partners and Australia’s Blackbird Ventures.
Cicada Innovations chief executive Petra Andrén congratulated Propeller’s graduation and said that the company had expanded and matured to a point where it couldn’t be accommodated at the incubator, based in Sydney’s Australian Technology Park.
“They got too big — we try and cap expansion at 200 square metres,” she told Business Insider.
“They raised a significant amount of money which means they now have all the skills needed on the team, a great board, and investors who are also advising them, meaning they don’t need to be subsidised and advised by us anymore.”
Vierboom said that while the company “had an eye on” another round of capital raising, more money was not an urgent priority at the moment.
“We’ve always taken the attitude that one of our top focus in building the business is to be cashflow positive. And that’s also a big part of the [future] plan.”
Propeller started off as a drone manufacturer but early on changed strategy to build software that allows mining and construction customers to accurately map and survey sites using unmanned aircraft. The shift was a blessing in disguise, with cloud-based software much more scalable as a product than hardware.
The startup now has a presence in both Sydney and New York City, and claims to have mapped over 1.4 million square kilometres for clients in 90 countries.
Vierboom said the series A funding and incubator graduation comes at a time when it’s embarking on “an aggressive expansion strategy” in the USA, using its extensive mining and construction experience in the Australian market.
Running such a technical business means the entrepreneur is very anxious about the changes to skilled labour visa (457) rules and the new foreign worker levies.
“We have four people on overseas visas – it’s not a ‘sweatshop’ but it’s the top people that are really building skills in our team,” said Vierboom.
He said tech companies had enough to worry about without immigration paperwork getting in the way of filling skills that just can’t be met locally.
“The foreign worker tax isn’t necessarily bad… but I’d like to see the money [raised from the new levy] invested in reducing the red tape.”