Impactful Startups V.006

This series provides weekly insights into my top startups (Pre-Seed // Seed) that are striving to make an impact across the globe.

Source: Droneseed.com

Today we are discussing a seriously cool company. That company is DroneSeed. For context, DroneSeed is making reforestation scalable — to make a dent in carbon emissions. It is paid per acre to plant tree seed vessels with DroneSwarms. It is one of the most advanced drone companies in the US as it has obtained three precedent setting FAA approvals. It is the 1st and only company allowed to operate heavy-lift drone swarms each carrying a 57lb payload. It is also the first to be able to operate heavy lift swarms BVLOS (Beyond visual line of sight). Its customers include timber companies, non-profits such as The Nature Conservancy, and government agencies. It was founded by Grant Canary in 2015. DroneSeed has several accoldaes under their belt as well. They first won the Beaverton, Oregon $100K Challenge. Shortly after, they were one of the nine startups out of 1,000 applicants to be selected for the TechStars Seattle program.

They’re a Seattle based with ~40 employees and rapidly growing.

To further understand the problem, nature’s capacity to reforest is in exponential decline due to fire severity and frequency. Existing tools and nursery supply chains are woefully inadequate to fill the gap.

DroneSeeds customers have millions of acres of land and — without intervention — 90% of those forests could be lost in 20 years in the highest risk areas.

They’re actively working to correct a serious problems and they’re doing it in a cost effective/efficient way.

Let’s look at their pricing model.

They typically quote per scenario but you can see the dramatic savings here.

Source: Droneseed.com

DroneSeed has some impressive funding milestones as well.

Source: Crunchbase.com

With their most recent round lead by Social Capital, and the eclectic Chamath Palihapitiya. You may be familiar with Chamath if you read my prior article and have followed the GameStop craziness.

They’ve followed a strong funding path and I expect a Series A is on the horizon very soon.

So who is the right investor for this opportunity? I think funding won’t be an issue moving forward given the prior funding. They as well have a very scalable and well demanded business. I imagine late stage venture funds with a thesis revolving around drones would want to take a look at this opportunity.

Exit Strategy: DroneSeed has countless exit opportunities. Whether it is a major strategic drone player or a government agency. Maybe a private equity player or a sponsor backed business. Really the opportunities are out there and scaling is the main issue at hand right now. Drone production can be very financially intensive and I think a strategic acquirer could make a lot of sense in this scenario.

Modeling out case scenarios based on the ultimate goals and progress thus far will allow for some clarity on a potential exit horizon. Next, calculating the impact multiple of money (IMM) will put pre-deal impact evaluation on par with financial evaluation. To calculate IMM, simply take social benefit ($) / invested capital ($) = IMM. Be sure to account for partial ownership depending on ownership within the cap table. At a high level successful investors within impact investing can expect investment performance to be inline or even stronger than traditional venture investments. Cambridge Associates in 2015 published its first impact investing benchmark. Their study shows just how attractive the returns can be.

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