Airborne intelligence: Selling as a service

Deep Dive
Airborne intelligence

There is a lot of talk about artificial intelligence replacing the human. There are a number of aviation sectors where this transition is welcomed, for example, cargo and firefighting will benefit from the ability to move pilots away from inefficient, potentially risky missions into areas where they are needed more.

Then there are some sectors – for example long-range infrastructure inspection or satellite data collection – which are evolving almost beyond recognition because of advancements in both software and aerospace. But how do companies developing these technologies for commercial use best sell their products?


Delivering better insights is key to the success of anyone trying to combine an aerospace platform with data gathering, no matter the altitude. For Washington-based startup Xplore, pencilled in to begin flying its first commercially-ready satellite in 2024, the world is on the cusp of a revolution in the form of an “explosion of data”.

COO and co-founder, Lisa Rich (inset below) tells us: “I believe every company will have a space strategy, they just don’t know it yet. If you are not thinking about how you can leverage all of this data to benefit your supply chain, your insurance company, your finance firm for predictive modelling, your agricultural lands, your climate change needs; if you’re not thinking this way, you’re going to be left behind.

“An explosion in data that no one’s ever had before can be so highly valuable if there’s strategic thinking about how to apply it effectively. This is the most exciting time next to the advent of the Internet,” adds Rich.

Drones and satellites might be miles apart, but for the purposes of data collection the two can be complimentary to a select but growing number of organisations – governments and large energy firms for example. Rich says: “A drone, that’s the magnifying glass that can really perform that precision inspection. And ours [the satellite] provides a longer range view — the bird’s eye.”

BVLOS growth

Last month, the FAA gave the first ever nationwide authorisation for BVLOS operations to SwissDrones and its aerial partner Phoenix Air Unmanned. The authorisation establishes a clear regulatory pathway for other operators to use the system to gain BVLOS approvals. It also points to other authorisations being close behind, namely that of Zipline and UPS Flight Forward, which currently operate BVLOS on limited scale under FAA Part 107 waivers. The US is far from the first (not even in the first 10) to authorise BVLOS operations for what is in effect a large drone, but when aviation’s biggest market jumps onboard it is a fair bet that sector is not far off commercialising globally.

SwissDrones’ platform, the SDO 50 V3 (pictured below) has a maximum weight of 191lbs (86kg) and can carry sensors weighing up to 70lbs (30kg) for over three hours. This means missions that used to take three months can now be done in three weeks. Australian startup, Xplorate began operations with the SDO 50 in Queensland back in March this year. The firm, which focuses on RPAS-enabled aerial surveillance, search & rescue and inspection missions, has a mission to bridge the gap “between traditional aviation operations and modern data gathering & analytics”. Xplorate was established to be aircraft and sensor agnostic, it just so happens that the SDO 50 is the only proven aircraft commercially available today that can carry payloads “low and slow” like a helicopter, according to CEO Ronnie Fahy (inset below).

“Imagine a world where if a power grid company or an energy pipeline company wants to inspect their assets all they have to do is sit at their desk and look at their monitor, or even better interact with their VR headset to fly down a full interactive digital twin of their infrastructure. Analysing vegetation growth or ground erosion through AI predictive analysis and change detection,” Fahy tells us.

“Compare that to todays most widely used method of an expensive helicopter with four eyes and a notebook and Bic pen (iPad if revolutionary) in the back. With VLOS this was possible but highly impractical. With BVLOS using aircraft such as the SDO-50, which is multi sensor capable, it is no longer just possible but commercially viable at a global scale,” he explains. What would take three months to do, VLOS Xplorate can achieve in three weeks, said Fahy. “This is at a degree of accuracy never before witnessed and powered by Xplorates very own intelligence and data analytics division.”

Expanding down under

Fahy describes the value in market size as a “tangible” example of the growth potential. He says we are talking about the coalescence of two of the fastest growing industries in the world –  data intelligence, AI and remotely piloted aircraft systems (RPAS). In 2022 the AI & Data Intelligence industry was worth US$136bn. It is estimated to be worth US$1.8tr by 2030. The RPAS industry was valued at US$20bn in 2022 and is estimated to be worth US$560bn by 2030. “RPAS are what the iPhone was to iOS. Inextricably linked and when delivered with excellence and customer value in mind is extremely valuable. Warren Buffett noted: ‘If someone offered you $10,000 to never buy an iPhone again, you wouldnt take it’. In the future, industrial customers will not want to give away the capability in data intelligence that Xplorate delivers through RPAS like the SDO-50,” says Fahy.

The firm closed a successful early investment round less than a year ago and is about to launch a bigger round towards the end of 2023. Xplorate launched in the middle of Covid – which could mean “we’ve got rocks in our heads” says Fahy – but Xplorate survived and the outcome is “you don’t know you’re actually a good company until you’ve been through a crisis,” he adds. “It shows at the worst of times, the value of the company is still there and we were able to continue to get customers and investors.” Since launching Xplorate has completed a number of projects for some very famous (undisclosed) companies, including the biggest methane quantification project ever for an energy firm earlier this year. It also offers digital twin services for energy companies, logistics trials and, from next year, power line inspections.

“What I have noticed a lot in the industry is people promising what they are going to do next or in the future,” says Fahy. “We’ve actually got major energy companies paying invoices. We hit our revenue targets for 2023 about halfway through the year and we’ve increased our targets for 2024 because we are delivering, because we have contracts.” 

The interest of big energy companies is validation of the services Xplorate offers and the technology that makes them possible, he explains. “Convincing someone as financially savvy as the world’s energy providers are to part with their money and disrupt what they do already – they are focused on extracting resources to provide the world its energy needs – is very challenging,” says Fahie. “Now we have done that with five majors in our first year, that lets me sleep at night.”

Upping the sensory load

Speaking of nighttime, the dark presents a problem when it comes to satellite-based data collection, as does poor visibility due to weather. This is where advances in computing come in handy. Xplore designed its eight sensor-equipped satellite to know when and when not to bother capturing data based on value. Similar to how range permits a drone to operate for up to three hours at a time before refuelling, valuable data collection time is confined to about three hours per day for satellites.

“From space, there are two important obstacles to data collection. Clouds and nighttime,” says Rich. “Our predecessors in the space industry had a single instrument on a platform which meant limited utility and resulted in the need to charge a high cost for the data it collected. When you think about your satellite only operating a few hours per day, that level of utility is exceedingly low.” So now what do you do with your satellite to extend the hours you can collect data with it?

“In our case, with our higher capability, higher power and propulsion, if we’re facing the Earth and there’s nothing to look at, we turn the satellite, face the stars and begin collecting astronomy data. Also we can achieve space domain awareness because we can be looking at other satellites when we turn ours around. That’s very interesting, now we have a satellite that’s high, high utility,” says Rich.

Dr. John O’Meara, co-chair, START team for the Habitable Worlds Observatory at NASA, advised Xplore on the development of its UV telescope. After launch next year, Xplore will have the second in space next to the Hubble (pictured above). “So we’re not big, we’re not an $8bn telescope. We’re itty bitty. But we do have some of the same wavelengths that provide valuable astronomical research,” says Rich. Telescopes in orbit are not impacted by atmospheric distortion that ground-based telescopes suffer from, so there is huge competition for time on telescopes amongst many of the major education institutions. Rich believes Xplore can tap into that demand. The firm has plans to launch an accelerator partnership to give astronomers first-in-line access to their data.

Gathering the data is the first step, but cleansing and interpreting the data is where the real value is created. This is a value that can be realised by those who create and sell solutions to customers instead of expecting them to stitch various pieces together, Brian Flynn, partner, DiamondStream Partners tells us. The investment firm pushed one of their portfolio companies to offer its product in terms of recurring service revenues instead capturing a big chunk on day one and then a tiny bit in the years after that. “Since helicopters last 30 years or so, if your tech is good and continues to be up to date, you’d ideally want to sell contracts that customers renew after the initial period. Far more lucrative long term in terms of lifetime customer value and the valuation multiples are higher,” explains Flynn.

Subscribe to our free newsletter

For more deep dives from SAF Investor, subscribe to our email newsletter.

Subscribe here


Leave a Reply

Your email address will not be published. Required fields are marked *