One of the enduring truths of big companies is that they aren’t innovative. They are “innovative” in the marketing sense, but fail to ever execute on new ideas, particularly when those ideas cannibalize existing products and revenues.

So it often takes a real competitor to force these incumbent, legacy businesses to evolve in any meaningful way. Usually that change leads to disruption, in the classic way that Clayton Christensen describes in “The Innovator’s Dilemma.” An upstart company creates a new technology or business model that is better for an under-served segment of a market, and as that company improves, it competes directly with the incumbent and eventually wins over its market with a vastly superior product.

Unfortunately, real life isn’t so easy, as WeWork and MoviePass have shown us over the past few years.

In both cases, there were incumbents. In movie theaters, you had AMC and the like, which built a business model around ticket sales (shared with movie studios) and food/beverage concessions that targeted occasional customers at a high price point. Meanwhile, in commercial real estate, you had large landowners and family holders who demanded extremely long rent terms at high prices, often with personal financial guarantees from the CEO of the tenant firm.

Google announced today that it is buying AppSheet, an eight-year-old no-code mobile-application-building platform. The company had raised more than $17 million on a $60 million valuation, according to PitchBook data. The companies did not share the purchase price.

With AppSheet, Google gets a simple way for companies to build mobile apps without having to write a line of code. It works by pulling data from a spreadsheet, database or form, and using the field or column names as the basis for building an app.

It is integrated with Google Cloud already integrating with Google Sheets and Google Forms, but also works with other tools, including AWS DynamoDB, Salesforce, Office 365, Box and others. Google says it will continue to support these other platforms, even after the deal closes.

As Amit Zavery wrote in a blog post announcing the acquisition, it’s about giving everyone a chance to build mobile applications, even companies lacking traditional developer resources to build a mobile presence. “This acquisition helps enterprises empower millions of citizen developers to more easily create and extend applications without the need for professional coding skills,” he wrote.

In a story we hear repeatedly from startup founders, Praveen Seshadri, co-founder and CEO at AppSheet, sees an opportunity to expand his platform and market reach under Google in ways he couldn’t as an independent company.

“There is great potential to leverage and integrate more deeply with many of Google’s amazing assets like G Suite and Android to improve the functionality, scale, and performance of AppSheet. Moving forward, we expect to combine AppSheet’s core strengths with Google Cloud’s deep industry expertise in verticals like financial services, retail, and media  and entertainment,” he wrote.

Google sees this acquisition as extending its development philosophy with no-code working alongside workflow automation, application integration and API management.

No code tools like AppSheet are not going to replace sophisticated development environments, but they will give companies that might not otherwise have a mobile app the ability to put something decent out there.

For the first time, this year Delta Air Lines had a large presence at CES. The carrier used much of its space to highlight the “parallel reality” screens developed by Misapplied Sciences and Sarcos Robotics, which brought its latest Guardian exoskeleton. At the show, I sat down with COO Gil West, an industry veteran with years of experience at a number of airlines and airplane manufacturers, to talk about how the company works with these startups.

Like all large companies, Delta has gone through a bit of a digital transformation in recent years by rebuilding a lot of the technical infrastructure that powers its internal and external services (though like all airlines, it also still has plenty of legacy tech that is hard to replace). This work enabled the company to move faster, rethink a lot of its processes and heightened the reality that a lot of this innovation has to come from outside the company.

“If you think about where we are as a world right now, it’s a Renaissance period for transportation,” West said. “Now, fortunately, we’re right in the middle of it, but if you think about the different modes of transportation and autonomous and electrification — and the technologies like AI and ML — everything is converging. There’s truly, I think, a transportation revolution — and we’ll play in it.

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re continuing our series on companies that have reached the $100 million annual recurring revenue (ARR) threshold, or are about to. ExtraHop is the company of the day, a Seattle-based firm that deals with cloud analytics and a portion of the security world called “network detection and response.”

ExtraHop is interesting because of its scale, its IPO plans and its history of capital efficiency. Regular readers will recall that we’ve praised Braze and Egnyte in this series, noting that, compared to some unicorns and other members of the $100 million ARR club, they had raised modest sums. Both have raised a multiple of ExtraHop’s own known capital tally.

TechCrunch got on the phone yesterday with ExtraHop’s CEO Arif Kareem and CFO Bill Ruckelshaus to dig in more. Here’s what we learned.

Growth

In conjunction with its ARR and IPO notes that we’ll deal with shortly, ExtraHop announced a number of financial metrics this morning, including: more than $150 million in bookings in 2019, up from over $100 million in 2018; and, revenue growth of “more than” 40% in 2019, a threshold it also cleared in 2018.

Sramana Mitra: Can you talk about what those bottlenecks are that can be tackled with IT? When you say AgTech, I take it that you are talking about information technology as it applies to...

___

According to a Grand View Research report, the global voice and speech recognition market is estimated to grow at 17% CAGR to $31.82 billion by 2025. The growth in the industry is expected to be...

___

Equinix announced today that it is acquiring bare metal cloud provider Packet, the New York City startup that had raised over $36 million on a $100 million valuation, according to PitchBook data.

Equinix has a set of data centers and co-location facilities around the world. Companies that may want to have more control over their hardware could use their services, including space, power and cooling systems, instead of running their own data centers.

Equinix is getting a unique cloud infrastructure vendor in Packet, one that can provide more customized kinds of hardware configurations than you can get from the mainstream infrastructure vendors like AWS and Azure. Company COO George Karidis described what separated his company from the pack in a September, 2018 TechCrunch article:

“We offer the most diverse hardware options,” he said. That means they could get servers equipped with Intel, ARM, AMD or with specific nVidia GPUs in whatever configurations they want. By contrast public cloud providers tend to offer a more off-the-shelf approach. It’s cheap and abundant, but you have to take what they offer, and that doesn’t always work for every customer.

In a blog post announcing the deal, company co-founder and CEO Zachary Smith had a message for his customers, who may be worried about the change in ownership. “When the transaction closes later this quarter, Packet will continue operating as before: same team, same platform, same vision,” he wrote.

He also offered the standard value story for a deal like this, saying the company could scale much faster under Equinix than it could on its own, with access to its new company’s massive resources, including 200+ data centers in 55 markets and 1,800 networks.

Sara Baack, chief product officer at Equinix, says bringing the two companies together will provide a diverse set of bare metal options for customers moving forward. “Our combined strengths will further empower companies to be everywhere they need to be, to interconnect everyone and integrate everything that matters to their business,” she said in a statement.

While the companies did not share the purchase price, they did hint that they would have more details on the transaction after it closes, which is expected in the first quarter this year.

Sramana Mitra: Can you talk about structure? Is there anything specific in your structure that is particularly interesting? Clara Piloto: I’ll start with in-person. We’re driven by learning-by-doing....

___

Codagenix, a company developing vaccines and viral therapies for illnesses ranging from the flu and respiratory viruses to dengue fever, has raised $20 million in a new round of financing.

The company’s new investment round was led by Adjuvant Capital, with additional participation from Euclidean Capital and Topspin Partners .

Codagenix will use the funds to support clinical development of its general flu vaccine and the first RSV vaccine for elderly patients — who are more at risk to serious consequences from contracting the virus.

The company uses a technology called “codon deoptimization” to make versions of viruses and viral therapies that are rendered relatively harmless by replacing more virulent pathogens with milder strains.

Codagenix said it will use the new financing to bring its RSV and flu vaccines through Phase 1 trials and move its oncology program for a breast cancer treatment into Phase 1 clinical trials. It also will launch two new vaccine development programs for what the company called “neglected public health challenges.”

“With the potential to develop optimized, more affordable versions of existing vaccines, Codagenix is poised to solve persistent public health challenges where existing vaccines have made enormous improvements, but still fall short of desired disease control objectives,” said Glenn Rockman, managing partner at Adjuvant Capital. “Equally exciting, the Codagenix technology has an opportunity to succeed where other immunization attempts have failed. We are proud to be supporting the further clinical development of the company’s RSV and influenza programs.”

Founded as a spin-out from Stony Brook University in New York in 2012, Codagenix has received backing from government institutions like the National Institute of Health, the Department of Agriculture and the U.S. Army for its dengue fever, flu, swine flu, RSV and foot and mouth disease virus vaccines.

In all, the company has raised $38 million from private nonprofits and venture capital investors, and $11 million in federal funding.

Oscar Health, the upstart healthcare insurance company and technology developer, expects to have roughly 400,000 members insured under its healthcare plans, who collectively will bring in roughly $2 billion in revenue for the company by the end of 2020, according to slides of a presentation from the JP Morgan Healthcare conference seen by TechCrunch.

Those figures, based on the open-enrollment period that just closed, would represent 50% growth both in membership and revenue for the healthcare provider co-founded by Mario Schlosser and Joshua Kushner, founder of VC firm Thrive Capital and the brother of senior Trump advisor Jared Kushner.

Earlier today, Oscar announced that it was partnering with Cigna to provide services to small business owners. Commercial health insurance is a small but growing proportion of Oscar’s total membership, and it’s one area where the company hopes to expand. Essentially, Oscar can bring its technology-enabled healthcare services to small businesses in concert with the large healthcare networks with which businesses are used to working.

To date, Oscar counts around 375,000 individual members on its insurance plans, with another 20,000 coming through small-group insurance and the balance derived from Medicare Advantage customers, according to a person familiar with the company’s business.

Only three years ago, Oscar was a much smaller business, with only 70,000 members after retrenching its coverage and pulling out of markets in Dallas-Fort Worth and New Jersey. From a footprint that encompassed New York, San Antonio, Los Angeles, Orange County and San Francisco, Oscar now expects to operate in 29 markets by the end of 2020.

Fueling that expansion is prodigious capital infusions the company has received over the past few years. In 2018 alone, Oscar raised $540 million from investors including Alphabet, Founders Fund, Capital G (Alphabet’s later-stage investment firm) and Verily, Alphabet’s investment firm focused on life sciences. In all, Oscar Health has raised $1.3 billion to fulfill its vision of providing better healthcare services through technologies like a mobile app for telemedicine, physician consultations, booking appointments, prescription refills and a more concierge-like healthcare experience for its members.

Initially, the company took advantage of the Affordable Care Act’s creation of new marketplaces for individuals to buy health insurance when it launched in 2012, but is now looking to buoy its growth by adding more deals with insurance providers like Cigna for small businesses.

Ultimately, the company envisions a healthcare industry where employer-defined plans will disappear as more consumers turn to Individual Coverage Health Reimbursement Arrangements. In that environment, Oscar’s bespoke services — like the recent partnership with the startup Capsule Pharmacy to provide same-day prescription delivery for Oscar’s members in New York — or the company’s tight relationship with providers like the Cleveland Clinic, become competitive advantages.

Seventy-five-million-dollar-funded legal services startup Atrium doesn’t want to be the next company to implode as the tech industry tightens its belt and businesses chase margins instead of growth via unsustainable economics. That’s why Atrium is laying off most of its in-house lawyers.

Now, Atrium will focus on its software for startups navigating fundraising, hiring and collaborating with lawyers. Atrium plans to ramp up its startup advising services. And it’s also doubling down on its year-old network of professional service providers that help clients navigate day-to-day legal work. Atrium’s laid-off attorneys will be offered spots as preferred providers in that network if they start their own firm or join another.

“It’s a natural evolution for us to create a sustainable model,” Atrium co-founder and CEO Justin Kan tells TechCrunch. “We’ve made the tough decision to restructure the company to accommodate growth into new business services through our existing professional services network,” Kan wrote on Atrium’s blog. He wouldn’t give exact figures, but confirmed that more than 10 but less than 50 staffers are impacted by the change, with Atrium having a headcount of 150 as of June.

The change could make Atrium more efficient by keeping fewer expensive lawyers on staff. However, it could weaken its $500 per month Atrium membership that included some services from its in-house lawyers that might be more complicated for clients to get through its professional network. Atrium will also now have to prove the its client-lawyer collaboration software can survive in the market with firms paying for it rather than it being bundled with its in-house lawyers’ services.

“We’re making these changes to move Atrium to a sustainable model that provides high-quality services to our clients. We’re doing it proactively because we see the writing on the wall that it’s important to have a sustainable business,” Kan says. “That’s what we’re doing now. We don’t anticipate any disruption of services to clients. We’re still here.”

Founded in 2017, Atrium promised to merge software with human lawyers to provide quicker and cheaper legal services. Its technology can help automatically generate fundraising contracts, hiring offers and cap tables for startups while using machine learning to recommend procedures and clauses based on anonymized data from its clients. It also serves like a Dropbox for legal, organizing all of a startup’s documents to ensure everything’s properly signed and teams are working off the latest versions without digging through email.

The $500 per month Atrium membership offered this technology plus limited access to an in-house startup lawyer for consultation, plus access to guide books and events. Clients could pay extra if they needed special help such as with finalizing an acquisition deal, or access to its Fundraising Concierge service for aid with developing a pitch and lining up investor meetings.

Kan tells me Atrium still has some in-house lawyers on staff, which will help it honor all its existing membership contracts and power its new emphasis on advising services. He wouldn’t say if Atrium is paid any equity for advising, or just cash. The membership plan may change for future clients, so lawyer services are provided through its professional network instead.

“What we noticed was that Atrium has done a really good job of building a brand with startups. Often what they wanted from attorneys was…advice on ‘how to set my company up,’ ‘how to set my sales and marketing team up,’ ‘how to get great terms in my fundraising process,’ ” so Atrium is pursuing advising, Kan tells me. “As we sat down to look at what’s working and what’s not working, our focus has been to help founders with their super-hero story, connect them with the right providers and advisors, and then helping quarterback everything you need with our in-house specialists.”

LawSites first reported Saturday that Atrium was laying off in-house lawyers. A source tells TechCrunch that Atrium’s lawyers only found out a week ago about the changes, and they’ve been trying to pitch Atrium clients on working with them when they leave. One Atrium client said they weren’t surprised by the changes because they got so much legal advice for just $500 per month, which they suspected meant Atrium was losing money on the lawyers’ time as it was so much less expensive than competitors. They also said these cheap legal services rather than the software platform were the main draw of Atrium, and they’re unsure if the tech on its own is valuable enough.

One concern is Atrium might not learn as quickly about which services to translate into software if it doesn’t have as many lawyers in-house. But Kan believes third-party lawyers might be more clear and direct about what they need from legal technology. “I feel like having a true market for the software you’re building is better than having an internal market,” he says. “We get feedback from the outside firms we work with. I think in some ways that’s the most valuable feedback. I think there’s a lot of false signals that can happen when you’re the both the employer and the supplier.”

It was critical for Atrium to correct course before getting any bigger, given the fundraising problems hitting late-stage startups with poor economics in the wake of the WeWork debacle and SoftBank’s troubles. Atrium had raised a $10.5 million Series A in 2017 led by General Catalyst alongside Kleiner, Founders Fund, Initialized and Kindred Ventures. Then in September 2018, it scored a huge $65 million Series B led by Andreessen Horowitz.

Raising even bigger rounds might have been impossible if Atrium was offering consultations with lawyers at far below market rate. Now it might be in a better position to attract funding. But the question is whether clients will stick with Atrium if they get less access to a lawyer for the same price, and whether the collaboration platform is useful enough for outside law firms to pay for.

Kan had gone through tough pivots in the past. He had strapped a camera to his head to create content for his live-streaming startup Justin.tv, but wisely recentered on the 3% of users letting people watch them play video games. Justin.tv became Twitch and eventually sold to Amazon for $970 million. His on-demand personal assistant startup Exec had to switch to just cleaning in 2013 before shutting down due to rotten economics.

Rather than deny the inevitable and wait until the last minute, with Atrium Kan tried to make the hard decision early.

You better move fast if you want to party with us and 1,000 of your closest startup entrepreneur and investor friends. We just released a fresh round of tickets to our 3rd Annual Winter Party at Galvanize in San Francisco on February 7. Tickets are limited, and they fly off the shelf faster than you can say seed funding. Don’t get shut out — buy your tickets here.

What can you do at the Winter Party? Plenty. Commune with the Silicon Valley community over craft beer and signature cocktails. Nosh on delectable appetizers. Converse and connect in a fun, relaxed setting. You never know who you’ll meet, but you can be sure to find influencers eager to meet and greet.

Demo your startup and introduce your genius product to the Valley’s finest thinkers, makers and investors. We have a very limited number of tables available — only two demo tables left — so get cracking. FYI: The price of a demo table includes four tickets to the party. Bring your crew and maximize your networking mojo.

What else goes down at the Winter Party? Lots of laughter, party games and activities — killer karaoke, anyone? — and plenty of photo ops. You might even score door prizes, like TC swag and tickets to Disrupt SF, our flagship event coming in September 2020. We’ll toss in a few surprises that night, too. Sweet!

Here’s the Winter Party lowdown.

Remember, we release tickets in batches. If you don’t score a ticket this time, keep your eyes peeled for the next round. Don’t miss out!

Come to the 3rd Annual Winter Party at Galvanize and hang out with your people. Enjoy the food, the drinks, the fun and the opportunity to expand your network in a relaxed setting. We’ll see you in February!

Is your company interested in sponsoring or exhibiting at the 3rd Annual Winter Party at Galvanize? Contact our sponsorship sales team by filling out this form.

( function() { var func = function() { var iframe = document.getElementById('wpcom-iframe-bc4f9854dc10ea97f096ae593bd4335b') if ( iframe ) { iframe.onload = function() { iframe.contentWindow.postMessage( { 'msg_type': 'poll_size', 'frame_id': 'wpcom-iframe-bc4f9854dc10ea97f096ae593bd4335b' }, "https:\/\/tcprotectedembed.com" ); } } // Autosize iframe var funcSizeResponse = function( e ) { var origin = document.createElement( 'a' ); origin.href = e.origin; // Verify message origin if ( 'tcprotectedembed.com' !== origin.host ) return; // Verify message is in a format we expect if ( 'object' !== typeof e.data || undefined === e.data.msg_type ) return; switch ( e.data.msg_type ) { case 'poll_size:response': var iframe = document.getElementById( e.data._request.frame_id ); if ( iframe && '' === iframe.width ) iframe.width = '100%'; if ( iframe && '' === iframe.height ) iframe.height = parseInt( e.data.height ); return; default: return; } } if ( 'function' === typeof window.addEventListener ) { window.addEventListener( 'message', funcSizeResponse, false ); } else if ( 'function' === typeof window.attachEvent ) { window.attachEvent( 'onmessage', funcSizeResponse ); } } if (document.readyState === 'complete') { func.apply(); /* compat for infinite scroll */ } else if ( document.addEventListener ) { document.addEventListener( 'DOMContentLoaded', func, false ); } else if ( document.attachEvent ) { document.attachEvent( 'onreadystatechange', func ); } } )();

Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.

Today we’re working to figure something out, namely the tradeoffs that D2C unicorn (and soon to be public company) Casper faces as it seeks to balance growth and profitability. And then we’re going to stack it next to its most obvious public comp, Purple, to figure out what it might be worth.

This is going to be a little more wonky than usual, but I can’t help myself. Let’s go.

Profit v. Growth

Every growing company faces a tradeoff in growth and profitability. The faster a company grows, generally speaking, the lower its profitability. In reverse, companies that grow more slowly can focus on wringing profits from existing operations. Companies that grow quickly while generating profit are rare (the Zooms of the world).

The tension between growth and profit is so well-known and understood that startups are held to a rule regarding the pair, called the Rule of 40. (In the post-WeWork IPO era, get used to hearing about this sort of thing more often.)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Francisco Jardim was recorded in November 2019....

___

Good morning friends, and welcome back to TechCrunch’s Equity Monday, a short-form audio hit to kickstart your week. Regular Equity episodes still drop Friday morning, so if you’ve listened to the show over the years don’t worry — we’re not changing the main show. (Here’s last week’s episode with Danny Crichton, which was a lot of fun.)

What was on our minds this morning? Brian Heater’s CES overview of sleeptech from the weekend, which made the argument that not all gadgets are bad for our sleep, even if there is some irony in using tech to help cure our tech-addled brains. Here’s to something a bit more substantial than blackout shades.

Also, Facebook closed out last week after setting some record valuations — so much for the techlash — and Casper’s IPO filing landed to much impact just as everyone was trying to get away from their desks and onto their couches.

Looking at the coming week, earnings season is upon us, but not quite yet for companies that we care about, the recently public tech and venture-backed firms of the world. There are some big names that are reporting this month, but over the next five days expect things to be a bit quiet. Pending news, of course.

And in terms of the Twitter forecast, with the CEO of Away coming back to her company as early as today, expect your timeline to feature one topic in particular. Can you guess what it is?

This morning we also took a look at two funding rounds:

And we wrapped with notes on the Casper IPO filing, and why it’s attracting so much commentary, and criticism.

Hit play, and let’s get this week started!

According to IHS Markit, the global video surveillance market is expected to grow 10% and cross $20 billion in 2020. The growth is estimated to be driven by the growing need for enhanced surveillance...

___

The tours and experiences market is projected to be worth $183 billion this year, and today a startup that has made inroads into the space through bootstrapping is announcing its first outside investment.

ToursByLocals — which sources local guides in some 162 countries, then helps tourists search and book them for either individual or small group tours and experiences in the place they are visiting — is today announcing 33 million Canadian dollars (US$25 million) in funding, from a single investor, Tritium Partners, money that it plans to use to hire more talent, build out its proprietary booking, payment and review publishing technology and expand its business development team.

This is the first outside funding for the Vancouver, Canada -based startup, which for the past 10 years has bootstrapped its business, building it up to 1.45 million customers and some US$45 million in revenues. It has around 100 employees today.

The valuation of ToursByLocals — co-founded by Paul Melhus, Dave Vincent and Luciano Bullorsky — is not being disclosed, but for some context, it’s operating in a dynamic (and crowded) space that includes competitors like Airbnb (by way of its Experiences effort); Berlin’s GetYourGuide, which last year raised funding from SoftBank and is now valued at over $1 billion; Hong Kong’s Klook, also backed by Softank and also valued at over $1 billion; Withlocals from the Netherlands; and more.

But it’s not all up, up, up: Vayable, an experiences startup incubated in Y Combinator, quietly shut down in December.

The company today says it has some 4,130 professional guides and 30,000 different tours discoverable on its platform, ranging from small group tours to private excursions. Its unique selling point up to now has been the fact that it curates the guides it works with — on average only one in 10 applying gets selected, the company tells me; and also, that it has focused on people who you might not typically associate with touristic outings, including “archaeologists, art historians, wildlife experts, photographers and foodies.” The idea here is that “local” doesn’t just mean someone who lives in the area, but someone very close to a particular subject.

“A private tour with a local guide is the best way to experience a destination. Since our founding, we’ve focused on creating truly memorable private tour experiences for travelers, while helping local tour guides offer customizable tours in over 1,000 destinations globally,” said Melhus, the CEO of ToursByLocals, in a statement.

“We are excited to partner with Tritium. In addition to growth capital, we value the strategic advice offered by both the Tritium team and its network of experienced marketplace executives, as we continue to scale up our operations as a leading online travel marketplace.”

Indeed, for a first outing into the private venture markets, Tritium Partners is a notable backer — a private equity firm that has built a focus in the travel market, backing the likes of HomeAway and a peer-to-peer RV rental marketplace, RVShare.

“ToursByLocals stood out as the premier private tour marketplace with the highest quality tours and local guides in the industry,” said Brett Shobe, a partner at Tritium, in a statement. “We’re thrilled to partner with the ToursByLocals team and look forward to leveraging our capital and resources to support and accelerate their exciting growth trajectory.”

Today, the startup appears to be picking up the majority of its business through direct sales, which helps the startup control the full experience. Part of its hand-picking of guides includes running background checks on them, and it also handles payments and any customer support directly. This seems to have a positive impact on both sides of its marketplace, both by getting repeat business from travelers but also positive responses from guides. ToursByLocals earns a 20% commission on all tours booked.

What will be interesting is to see whether, in a bid for more scale, ToursByLocals expands the third-party aspect of its business. That could include feeding its own product into aggregation platforms like Booking.com or Airbnb, which are keen to expand their revenues per user with extras like tours and experiences, on top of airline and other transportation sales, accommodation bookings and other travel services they may already offer.

Or it could mean bringing in more third-party content to its own platform, for example larger tours or other travel-related products and services. The company is also looking at ways of letting people “share” small tours with others, for example if two couples on a cruise are looking to split the cost of a four-person day tour when they each step ashore during a cruise.

Clara discusses MIT’s professional education initiative that is run in an online-offline hybrid format. Sramana Mitra: Let’s start by introducing our audience to yourself as well as your work at MIT...

___

Skyqraft, a Swedish startup using AI and drones for electricity power-line inspection, has picked up $505,000 in early backing.

Leading the round is “startup generator” and investor Antler, with participation from a number of angels, including Claes Ekström and Tomas Kåberger.

Founded in March 2019 and launched that September, Skyqraft provides what it calls “smart” infrastructure inspections for power-lines. It uses unmanned airplanes, combined with AI, to gather images and detect risk automatically.

This is in contrast to the status quo, where power-lines are typically inspected by teams of people and helicopters, which isn’t ideal on a number of fronts.

“Power-line inspections most importantly are not environmentally friendly, very costly and unsafe with the use of helicopters and people,” Skyqraft co-founder and CMO Sakina Turabali tells TechCrunch. “We provide smart infrastructure inspections using unmanned airplanes by gathering images and 360 videos and feeding that data into a machine learning system that automatically detects any risk to the power-lines.”

Skyqraft says it has already achieved several key milestones, including having a contract in place with one customer that has stopped using helicopters for yearly inspections. The company is also working on pilots with Eon, two Swedish municipalities and New York Gas and Electric.

“Our competitors are mainly quadcopter drone operators,” said Turabali. “And they inspect only the transmission grids. We on the other hand, offer our customers a full service and inspect both transmission and distribution grids also using our machine learning system to detect any threats automatically.

“Some of our competitors also only provide machine learning software and do not fly with drones and inspect the grid. They usually get their data set from partners’ flying drones. In a machine learning (ML) world, successful ML is 85% data handling and 15% software work. We use a uniform aircraft camera setup that can gather data in a swift and cost-efficient manner. That means we will do the data handling in a streamlined manner from the beginning and have total control of the data acquisition platform, i.e. the aircraft plus cameras.”

Meanwhile, Skyqraft says it will use the new funding for building further machine learning software, and expanding the map user interface for its customers. It will also continue to build out its drone operation teams, and test new apparatus.

In a statement, Lisa Enckell, partner of Antler, adds: “Skyqraft has developed a new solution on an unsolved problem. Their focus on emerging data collection methods gives them the opportunity to make an industry safer, more efficient and more sustainable. We’re delighted to be part of this journey.”