Saudi Aramco's venture capital arm Wa’ed Ventures has led a $14 million funding round for a Japanese start-up specialising in drone services, as the fund backs new technologies in line with the kingdom's economic diversification push.
Wa’ed Ventures' backing of Tokyo-based Terra Drone is the $200 million fund's first investment in Asia, after expanding its mandate last year to target global companies, said a joint statement on Wednesday.
Through this investment, Terra Drone plans to open a new subsidiary in Saudi Arabia to localise its drone services and continue to serve the global autonomous vehicles market, the statement said.
“Supported by the global track record of Terra Drone, our investment represents Wa’ed’s commitment towards building the UAM [urban air mobility] ecosystem in the kingdom, one that circles around sustainable economy” Fahad Alidi, managing director of Wa’ed Ventures, said.
“We foresee rapid adoption for drone services in numerous industries, and Terra Drone is well-positioned to localise their proprietary technology across the region, starting with the kingdom.”
The investment to bring new drone tech to the Arab world's biggest economy comes amid the kingdom's plans to attract new business, diversify non-oil revenue streams and become a local hub for advanced technologies.
The global addressable market for autonomous aircraft is projected to reach $1.5 trillion by 2040, creating opportunities for investors and benefiting various sectors, according to research by Morgan Stanley. Its more bullish forecast places the market at $2.9 trillion.
Wa’ed Ventures’ investment comes on top of the $83 million already raised in previous funding rounds by Terra Drone.
Some of Asia's largest institutional investors participated in the earlier Series A and Series B funding rounds, including Mitsui & Co, SBI Investment Co, Tokyu Land Corporation and Seika Corporation.
Founded in 2016, Terra Drone now operates in more than 25 countries, with customers including Toshiba, France's oil major TotalEnergies, ExxonMobil and Chevron, according to its website.
It specialises in geographic data acquisition, industrial inspections and high-end aerial imagery, using unmanned aircraft.
With a workforce of 500 employees, Terra Drone provides services in sectors including oil and gas, utilities, renewables, mining and construction, among others.
The company provides drone hardware and cloud-based software in more than 1,000 projects, the statement said.
Wa'ed Ventures seeks to invest in high-growth tech start-ups across various sectors.
Established in 2013 and based in the eastern city of Dhahran, Wa'ed Ventures manages a portfolio of more than 50 start-ups, providing loan financing, venture capital investment and incubation services.