Garuda Aerospace To Go Public In Next 2 Years, Eyes INR 1,000 Cr Revenue In FY24: CEO

As India aims to become the drone hub of the world by 2030, there is a palpable enthusiasm and energy in the country’s drone industry. Fuelled by government incentives to promote domestic manufacturing, a large number of drone manufacturers and early adopters of drones are working in unison to leverage technology to usher in a revolution across industries.

Garuda Aerospace is one such leading startup in the Indian drone space, trying to make its mark not only in the country but also globally.

Founded in 2015 by Agnishwar Jayaprakash, Garuda Aerospace manufactures and sells drones as well as provides drone-as-a-service (DaaS). It designs and builds drones for a wide range of applications, including agriculture, defence, mining, mapping, and warehouse management.

In November last year, the drone startup secured $5 Mn funding from an infra development company, a group of HNI, and angel investors from India, the UAE, and Singapore to focus on building advanced drone solutions for the armed forces.

Despite the ongoing funding winter, Garuda Aerospace plans to raise $100 Mn-$150 Mn in Series B funding in 2023 at a valuation of $500 Mn-$600 Mn, its founder and CEO Jayaprakash told Inc42.

Riding on the increasing drone usage across industries, government schemes, and interest of domestic and foreign investors in drone companies, Garuda Aerospace is looking to list on the stock exchanges by the end of 2024. The startup, valued at $250 Mn currently, is looking to close the financial year 2022-23 (FY23) with a revenue of INR 100 Cr, the founder said.

In an interaction with Inc42, Jayaprakash talked about the startup’s journey, its domestic and international collaborations, IPO plans, reliance on imports, and much more.

Edited excerpts 

Inc42: Garuda Aerospace has achieved various milestones in the last few years. What has the growth journey been like?

Agnishwar Jayaprakash: When you look at drones, many people think it is used for weddings, etc., but there is an entire use case in agriculture, Industry 4.0, logistics, and many other places where we believe that drones can play a significant role, and that is what we started doing in 2015-16. 

Today, we manufacture 30 different types of drone fleets, and have manufacturing facilities in Chennai and Haryana. We have worked with the United Nations (UN). In India, we worked with the forest department to build drones that can be fitted with loudspeakers to prevent human-animal conflict, which won us a UN award for one of the top 10 socio-economic innovations in 2016.

We have evolved a lot since then. During the Covid pandemic, there was a forced adoption of drone technology because people could not be in contact with each other. India needed to adopt automation and drones were right in that realm of adoption. Thankfully, we had established ourselves as one of the dominant players with a pan-India team and the largest drone fleet in India with over 400 drones and 500 pilots in about 80 cities across the country. 

Among the top corporates in India, we have served over 350-400 clients, including Vedanta, Godrej, Adani, Reliance, and Tata Projects. We have served several government organisations like NTPC, SAIL, IOCL BPCL, and ISRO, and have also collaborated with DRDO, HAL, NAL. We have served the defence forces and partnered with the NDRF. We have our own indigenous software and firmware which control drones and make them 80% autonomous. 

Our goal is to sell 25,000 drones in the next 18 months and to export 10,000 drones to 100 countries in the next 12-15 months. 

Inc42: What do the company’s financial numbers look like right now and what are the growth goals?

Agnishwar Jayaprakash: We are on track to close FY23 with a revenue of INR 100 Cr. We are looking to close FY24 with a revenue of over INR 1,000 Cr as we hope to sell 25,000 drones. Post that, we will start our IPO procedure.

Inc42: Have you set any timeline for the IPO?

Agnishwar Jayaprakash: We will hopefully start the proceedings post March 31, 2024 and by the time the bell rings on the BSE or the NSE, it would be October-November 2024.

Inc42: How are you approaching the idea of going public?

Agnishwar Jayaprakash: The idea of the IPO should not sway us away from building a fundamentally good unit economy-focused, market-agnostic, recession-proof, and asset-light business model. 

We don’t want to be a startup with an inflated valuation because then it becomes difficult to maintain that and you just keep slipping. I want to climb the mountain. I feel that adding value and making a profitable business automatically will appeal to retail investors.

Our focus has been on profitability and we are already profitable. Last year we had a net profit margin of 24%. This year it is hovering around the same mark. We had a lot of expenses this year, but we would still hover around 20% to 25% gross profit margins. 

We have already started receiving good valuations, and going forward, we would want to raise probably one Series B north of $100 Mn-$150 Mn at about $500 Mn-$600 Mn valuation. Post that, we will close our books with INR 1,000 Cr plus revenue in FY24, with a good 20%-25% profit margin, which would result in INR 200 Cr-INR 250 Cr profit. And then you are a financially super strong and fundamentally great company for people to put money in. 

Inc42: Let’s talk about your products. Can you give us a better understanding of Garuda’s products and services? Also, what is the split between products and services in terms of revenue?

Agnishwar Jayaprakash: We have developed drones for Swiggy, which are delivery drones that can carry 20-25 kgs of weight. There is Droni, which is named after cricketer Mahendra Singh Dhoni, and is a videography drone. Our Industry 4.0 drone can be used for mining operations and large-scale mapping. We have drones which are deployed in warehouses of Flipkart and Delhivery for warehouse management. We have a seeding drone called Vriksh Vaahan and we have planted 75,000 seeds with Maharashtra and Tamil Nadu forest departments. We have a border surveillance drone, and also a landmine detector drone which we’ve been utilising for the army.

Individual farmers, rural entrepreneurs, people who want to become our service providers are mostly our partners. Of course, there are a few corporates who buy our drones, but it’s mostly individuals who buy them. Large corporates and companies are utilising our services.

So, drone sales are B2C, while services are either B2B or B2G. In fact, about 20%-25% of our revenue historically comes from government projects.

Coming to revenue split in terms of drone as a service and drone sales, in the past, it used to be about 80:20, but going forward, it will be more lopsided, with income from drone sales increasing to 60%.

Inc42: How are you looking at Kisan or farming drones?

Agnishwar Jayaprakash: We started to work about 3 years ago on agricultural drones. Now, we are creating a huge impact in villages.

There are about 40 Cr acres of farmland in our country. In that, the farmers are spending 24K Cr-25K Cr every single year in spraying pesticides and fertilisers, and usually, it is done by backpack manual spraying activity, which is very inefficient. So, we thought that we can make a huge impact in the agricultural revolution by introducing precision agri drones in the fields where they can cover 7X-10X the amount of acreage that the manual sprayers can do. We also help reduce pesticide usage by 70%, water usage by 80%, and we are increasing food crop productivity by 27%.

We have already pre-booked about 2,500 drones. Over the next 2-3 years, we will have over 1 Lakh-2 Lakh agricultural Garuda Kisan drones in the fields and they are going to be collecting a lot of data and information, which will ultimately help and support farmers in precision agriculture, enhancing crop productivity.

Inc42: Can you shed some light on your expansion plans? 

Agnishwar Jayaprakash: We have established ourselves in Dubai, Malaysia, South America, North America, and Europe. We want to scale and expand further, and hopefully, we will be able to reach 100 countries in 2023 and 2024.

First, we wanted to cement market dominance in India and then expand.

Inc42: So where do you get maximum revenue from – India or the foreign markets? 

Agnishwar Jayaprakash: For the time being, India is seeing a big shift in terms of drone adoption, and that is where we get maximum revenue from. But moving forward, I believe that foreign markets will start contributing significant revenue 2024-2025 onwards. 

However, I feel there is huge potential in the Indian market because we are an Indian company and there is a ‘Make In India’ sentiment. Also, our base is here. 

Inc42: Of late, there is a big focus on domestic manufacturing and reducing imports? Which components used in Garuda’s drones are manufactured in India? You still have to rely on imports for batteries, right?

Agnishwar: Yes, there is a heavy dependency on imports when it comes to batteries. However, at the same time, we are rapidly developing alternate sources. There are other opportunities and technologies coming up like hydrogen fuel cell technologies and even lithium-ion. 

There are a lot of ‘Make In India’ battery companies that are coming up in terms of trying to discover different forms of energy sources, especially for drones. So yes, while it has been a problem in the past, I don’t see much problem in the future because of the number of companies, technologies, and innovations taking place in this space.

For the rest, we have the capability to manufacture the frame, the landing gear, the propellers. We still import some components of the motors but generally, the motors are assembled here and we utilise different types of software and firmware, which are indigenously designed to control the drones. 

Inc42: What would be your next step of growth?

Agnishwar Jayaprakash: Right now, Kisan drones are our biggest focus. As we move forward and become technologically sounder as a company, and having worked with giants like Lockheed Martin, our focus is going to be on defence. 

Ultimately, the goal of Garuda is to build smart drones which can fly completely autonomously. Right now, we have achieved about 70%-75% automation, we want to make them 100% autonomous. 

Inc42: What do you think will be the growth trajectory of the drone industry in India?

Agnishwar Jayaprakash: There has been global uncertainty on any form of data-capturing device which is made by the Chinese. So, a lot of Chinese drone companies are getting banned. This gives a huge opportunity for ‘Made In India’ drones because the western world has drones which are far too expensive. And India, although we might not beat the Chinese in terms of hardware, we do come with good software and information security.

Drones are going to be the next revolution, like the wave of ecommerce startups during 2010-2015, food delivery apps during 2016-2021, fintech companies post demonetisation during 2016-2020, and edtech during the pandemic.

Now you are having a huge wave of automation – drones, cloud computing, and anything related to Industry 4.0 and increasing efficiency, and that is where the sweet spot is.