Drone technology startup SwarmX is negotiating the sale of its intellectual property with a Chinese-American drone company as its founder is working on a new startup, a person directly aware of the development told VCCircle.
"They are not selling the company, but sourcing buyers for their IP,” the person mentioned above said. The startup has hired an investment banker to negotiate the sale. However, the individual declined to reveal the name of the buyer.
“SwarmX has actively collaborated with several companies in the drone ecosystem, however, no such transaction has taken place,” Pulkit Jaiswal, co-founder and chief executive of SwarmX told VCCircle, when contacted.
It is not clear why SwarmX is selling its IP, but according to the person mentioned above, the startup does not want to manufacture drones anymore and “wants to enable other companies to do what it is doing,” he said.
Chinese companies have succeeded in building similar systems and at much bigger scale, so it is difficult for SwarmX to compete with them, the person claimed.
Singapore-based SwarmX Pte. Ltd is backed by TV Mohandas Pai, the chairman of Manipal Global Education and former CFO and HR head of Infosys. It was founded in August 2015 by Stanford University graduate Jaiswal. He had earlier co-founded Garuda Robotics, a business-to-business artificial intelligence and drone company operating in agriculture, infrastructure, and security.
The startup builds autonomous drones which collect data. Its main product is Hive, which is a platform equipped with weather sensing technology that assists in surveillance activities. The HiveMind operating system enables a user to control multiple drones from a single interface.
Co-founder Jaiswal along with a US-based hedge fund executive are working on launching a new venture, Numbr5.
“Numbr5 is a new artificial intelligence-centric product that is currently in stealth mode. We will furnish more details in the coming months,” Jaiswal said in an email response.
The duo is looking to raise around $2-3 million for the new venture.
India’s drone technology conundrum
The number of drone companies that operate in India is a frugal four to five, all of which are struggling to survive as the country lacks a proper framework for drone technology. The aviation regulator, the Director General of Civil Aviation (DGCA), is yet to come out with a formal policy to regulate the flying, sale, and purchase of sub-conventional aerial platforms such as microlight aircrafts, para motors, multi-copters, para gliders, hang gliders, and drones. In the absence of a policy, the DGCA on 7 October 2014 issued a public notice through which it banned flying of any unmanned aircraft in the country’s airspace.
"There has been a long wait for enabling guidelines for operations of drones in India from DGCA and large investors don't get in until there is some clarity. Drone startups in the US with a similar set of technologies are raising $10-15 million Series A rounds and here similar startups are struggling to cross even the $2 million mark," B V Naidu, managing partner, StartupXseed Ventures, told VCCircle in a prior interaction.
Developing drones requires significant research and development, resources, and a diverse set of expertise, all of which are expensive to come by, he explained.
Given that all the players in this market in India are still early-stage startups, an industry-supportive approach needs to be considered while framing these guidelines as startups cannot sustain themselves under such complex compliance requirements, he stated.