ideaForge reduces reliance on imports for drone production, boosts R&D spend

One of ideaForge's drone products

Drone manufacturer ideaForge is ramping up innovation by investing 22 percent of its annual revenue into research and development, spending over 47 crore ($6 million) last fiscal year, and with most components indigenous to keep imports to just 21 percent of costs.

"We see R&D as critical to maintaining our technology leadership and delivering the most advanced drones," said ideaForge CEO Ankit Mehta in an interview to Moneycontrol.

ideaForge CFO Vipul Joshi, who was also part of the interaction, noted the company's R&D expenditures reached over 47 crores (USD 6 million) last fiscal year, nearly double the previous period.

"This focused investment has allowed extensive testing and refinement of new capabilities," Joshi said.

"We spent about 22 percent of last year's revenue on product development. Over half of our workforce is now part of the development team. We're increasing the pace at which we absorb talent, bringing in people to build new platforms and deepen our technological capabilities in the areas essential for these platforms," Mehta added.

The company's CFO also said that most components are designed in-house to protect intellectual property.

"Imports made up only about 21 percent of our revenue last year, which shows that we do a lot in India. The technology, design, software, and core intelligence for the chips and subsystems we use, many of which are sourced from India, are all developed by us. Essentially, the value we add comes from our own subsystems and core software technology," Joshi added.

Core systems like autopilots leverage internal R&D, Mehta elaborated. Recent projects include larger logistics and tactical drones as well as extended-flight Netra fixed-wings.

While defense currently dominates revenues, Mehta sees "substantial opportunities emerging in the civilian market." Areas like "public safety, agriculture, and logistics represent huge growth potential," he noted.

The company is also expanding into the US market. However, Mehta admits that gaining entry into the US market is challenging.

"So it is challenging because, one, they have very, strong incumbents. And apart from strong incumbents, they have very fixed habits now, right? Because they've been using a certain class of platforms, their entire setup is centered around that category of systems. And so those category of systems,  become a little bit of a challenge for them to look at other platforms."

However, geopolitical changes have made conventional platforms less accessible, prompting a search for diversified fleets, Mehta said. ideaForge is learning and adapting to US regulations and customer requirements to reduce operational stress and increase adoption of their systems.

To prepare, ideaForge is collaborating with U.S. partners "to understand regulations and customer needs globally," explained Mehta. This experience will help expand operations overseas as rules evolve.

Through concentrated spending on indigenous innovation, ideaForge aims to establish itself as the leader in India's nascent but fast-growing commercial drone sector. But as Joshi stated, "only time will tell if this strategy pays off."