It did not take marquee investor Shankar Sharma more than five minutes to decide on buying a stake in IPO-bound drone startup Droneacharya Aerial Innovations, its founder said.
"Sharma is a giant, a behemoth in the industry. But surprisingly, all it took for us was five minutes. This happened when I was in Dubai, where we happened to meet," Prateek Srivastava, who is also Chief Executive Officer of the Pune-based company, told Moneycontrol.
In the pre-IPO funding round, investors led by Sharma and others including Harshal Mode, an angel investor in media and entertainment-focused startups, and Ashish Nanda, founder and managing director of Innovations Group, a UAE-based conglomerate, bought a minority stake in the company.
"He (Sharma) has always been very bullish about EVs (Electric Vehicles) and green energy. Looking at my prior history, and the tailwind that the drone industry is currently getting, it was a very quick decision for him," Srivastava said.
"In hindsight, maybe he wanted to get into this industry, and with us it just clicked," he added.
Sharma said, ""Drones are being widely used in the country across industries for surveys, deliveries and surveillance, and this segment is expected to perform strongly in the coming years. We see a great value creation as the company has within a very short span been able to scale up its operations and has dynamic plans ahead."
Srivastava has around 16 years of experience in the geospatial industry and he was earlier CEO of Japan-based Terra Drone's Indian unit, Terra Drone India.
The company's December 13 - 15 initial public offering (IPO) of shares will be priced between Rs 52 and Rs.54 apiece. Of the 6.29 million shares on offer, 898,000 are reserved for high net worth individuals (HNI), 1.194 million for qualified institutional buyers (QIB) and 2.092 million for retail investors.
Financial security
The main reason for the IPO, according to Srivastava, is to ensure that the startup is secured from unprecedented and unforeseen events like COVID-19.
"We want a future-proof or a pandemic- proof business strategy. Many startups were swept away in India during COVID-19. One of the major reasons was lack of money," Srivastava said.
Other than that, Droneacharya also has plans to expand domestically and internationally, and bolster its manufacturing capabilities.
The seven-year-old startup has offerings in the drone services industry and in training and education, which Srivastava pointed out, makes up the largest share in the startup's revenue.
"There are around 25-30 Directorate General of Civil Aviation (DGCA)-certified drone training organisations in the country. And only around 5-6 are active right now," Srivastava said.
Need for drone pilots
The startup has 12 courses in its drone pilot training program, and more than 600 people have been trained and placed in jobs, he said. Out of them, 225 to 230 are DGCA-certified pilots, he added.
Srivastava is banking on growing demand for drone pilots in the future as a source of more revenue.
"Currently, there is a need of around 100,000 pilots. And in three years, as Civil Aviation Minister (Jyotiraditya Scindia) had said, India would need 10 lakh pilots," he said.
"Currently we have a market cap of around 30 percent. Every third person in the country (drone pilot) is a Droneacharya product. In the future, we are aiming to increase that share to 50 percent -- every second person in the drone industry should be a Droneacharya product," he added.
Droneacharya's training courses cost around Rs 55,000 and last for around a month.
"This is one course which has the fastest ROI (Return On Investment) possible. It is less than a month. The training course has a validity of 10 years, and you can land a job for at least Rs 35,000 to Rs 40,000 a month," Srivastava explained.
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