It’s a head-scratching partnership on the surface. An oil giant investing in a Japanese drone startup certainly qualifies as interesting. But there is a lot more to this deal than meets the eye. Saudi Aramco sees Terra Drone technology as a way to improve operations at its Saudi Arabia facilities. But more on that in a minute.
As far as the investment is concerned, TechCrunch reported that the Japanese drone startup recently raised US$14 million in Series C funding with this being led by Wa’ed Ventures, the venture capital arm of Saudi Aramco. This was the oil and gas outfit’s first investment in Asia.
For Terra Drone, the latest round of funding allows for further global expansion. What is unique about the startup is how it has found unique ways to repurpose drones for different usages across multiple industries.
Those global efforts include a robust drone traffic management system that has been used in the construction sector to cut down on costly and dangerous inspection efforts. In Denmark, the company launched its Health Drone Project to transport blood and medicine.
“Aramco’s investment in Terra Drone through its VC arm Wa’ed Ventures is another example of the global recognition for our achievements, which raises the expectations for our team as we continue to push forward and lead Terra Drone to the forefront of the global innovation track,” Toru Tokushige, Founder and CEO of Terra Drone Corporation, explained.
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This brings us back to our original question. Why, exactly, did Saudi Aramco invest in a Japanese drone startup? Simply put, it offers a safer, more cost-effective way to carry out inspections and spot issues like oil leakage.
“Supported by the global track record of Terra Drone, our investment represents a compelling attempt at building the UAM ecosystem in the Kingdom, one that circles a sustainable economy,” Wa’ed Ventures Fahad Alidi, Managing Director, said in a press release. “We foresee rapid adoption for UAM technology as an emerging tech vertical in the region, and Terra Drone is well-positioned to localize their innovation across the region, starting with the Kingdom.”
It appears Wa’ed Ventures is banking on Terra Drone innovation being adopted by other oil and gas companies in the region. The Japan-based drone startup has already unveiled plans to set up a new Middle East/North Africa subsidiary that it believes will be key in expanding business.
This is similar to investments other oil and gas firms have made in recent times. The strategy is to find startups that can provide strategic short-term operational benefits while exploring other opportunities that may be realized long-term. Time will tell if Terra Drone fits that profile but their tech certainly looks the part.
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