Their hardware products — including drones, components, sensors — and software services AgVault + OnTop serve the agriculture, infrastructure and public safety sectors.
This comprehensive approach has netted Sentera both paying customers and investment cash. Between the two, they’ve become a profitable startup in a space full of technical challenges and barriers to entry. Safe to say that Sentera is Minnesota’s largest and most successful startup in the drone industry right now.
We connected with CEO Eric Taipale to hear more about what he’s doing that is working:
How did you come up with a figure of $8.5m for your series A?
It’s based of a variety of factors, a very complex spreadsheet that so far has proven to be pretty accurate.
Are there subsequent rounds on that spreadsheet?
It’s an interesting question that we discuss regularly. Being a Minneapolis startup is different than being somewhere else. We intend to use this round to get us into a strong position, one of sustainability and healthy growth. That said, given the possibilities and what else we could get into — the questions is: do we want to consider a larger series B round?
Who are the current investors?
A strategic group of multiple ag-tech investors investing under one entity. They are operators in the industry that can benefit from faster, better, data that can be processed from the field.
What would a good partner look like in the event you are to pursue a larger series B?
Agriculture is a very unique market in many ways. With that said, there’s some arrogance out there when it comes to understanding the industry and respecting what it takes to be successful. It’s hard to find those who get it — both here and elsewhere. We would want to partner with someone who truly understands and appreciates our technology, our model, and our accomplishments to date.
Is that entity Minnesota based?
What are you going to use the money for?
With the earlier funding, we were able to secure some great initial partners, such as John Deere, and demonstrate that we can take data from drones and create products that generate tangible ROI. Deploying products that can input, process, and output. The remaining money ($2m) that we closed on June 1 will go towards refining our value-added services on top of this.
How many current employees do you have?
23 full time, part time counting interns and contractors, 27.
Is there more hiring in store throughout 2016?
Yes, are revenues are scaling faster than our labor expense line, which is great, and I could see a 20% expansion on the tech side and more than that in areas of support.
What is the largest driver of that revenue?
The precision agriculture market (both resellers and growers) is our biggest and it’s prime time right now. Specifically, product by volume, our entry level product that combines a consumer drone with precision sensors and data management SaaS AgVault is our top seller. Our sensors business and data management software can be combined or sold separately, both of which are popular.
Geographically speaking, where is the greatest demand for your products?
There’s a big presence, probably 70%, in the upper midwest given the corn and soybean acreage and our proximity to that. We also have customers in Brazil, Europe, Australia, the southeast and western regions of US.
How do you see that evolving in the future?
For precision agriculture, there are big opportunities in S. America, Europe, Asia. We’ll start to significantly address those in 2018.
Where is the hotspot for drones right now?
We are the largest and in a leadership position in Minnesota as far as I know, but really there’s not that much in the Midwest, surprisingly. Consumer drone action has really shifted to Asia, and domestically, the west coast. In terms of commercial drones, there really isn’t one area that stands out right now.
Who or what are you competing with out there?
Regulations is the first layer of friction. The FAA is taking measures to relax operations for commercial drones, but there’s a long way to go. Looking back over the past few years, the drone ag market has become very noisy and cluttered. In the agriculture side, a lot of growers have been burned if they were early adopters using insufficient solutions. Sometimes we go up against that resistance, but fortunately have solutions that are proven time and time again to work.
How much market share do you have and what’s the potential?
Our products have been used in over 10 thousand flights and covered at least 20 million acres so far. It’s hard to say how many end users we have…for example, John Deere is a customer and a distributor. I would estimate around 500 currently and scaling that into the thousands by the end of this growing season.
The potential we see in precision ag would be 50-60 thousand commercial units, not counting the industrial side of the market (safety, inspection, construction, etc). Our role in that is to collect, manage, process the data associated with that using AgVault and OnTop.
How do you break down your markets by volume?
Agriculture is about 60-70% and infrastructure is 20-30% and public safety is about 10%
What do you think with regards to the future of Sentera and potential risk to prosperity?
We’re in a very competitive industry where the pace of technology is moving very rapidly. We’ve proven very capable and nimble so far, but it’s never safe to settle on your yesterdays.