Drone company seeks $750,000 on Snowball Effect

A drone company from the Waikato is the newest business seeking funds through equity crowdfunding website Snowball Effect.

The offer for shares in Aeronavics, which designs and manufactures remotely piloted aerial systems (RPAS), went live to the public at 6pm. The offer has already attracted $414,500 from pre-registered investors, which is 55% of its $750,000 target.

The Waikato-based company aims to raise up to $1.5 million, or 15% of the company. The minimum investment is $1000 (cost per share $1) and the offer ends March 14 unless fully subscribed earlier.

Aeronavics, which has a current company valuation of $8.5 million, plans to use crowd-raised funds for research and development, tooling and production line equipment, personnel and working capital.

Its offer document shows it wants to build a fast-growing, profitable $50-100m revenue company in the next five to seven years. 

Aeronavics launched its first product in 2010 and targets the professional and industrial segments of the $11 billion global RPAS market, which is forecast to be more than $US22 billion by 2020.

Its drones, with an average selling price of $20,000, are used across a variety of industries, such as film, emergency services, oil and gas, farming and forestry. Its clients include NASA, Disney and Dreamworks.

Last financial year the company had pre-tax profit of $62,428 on revenue of $1.82 million. Its conservative estimates for the year ending March 31, 2015 is pre-tax loss of $77,382 on revenue of $1 million, and for the 2016 year pre-tax profit of $340,600 on revenue of $2.62 million.

The company chose equity crowdfunding as it is an efficient way to raise capital, a good opportunity to raise the brand’s profile and gives the public the opportunity to invest in a local company at the forefront of the global drone revolution, Aeronavics general manager and director Linda Bulk says.

“This is an exceptional and unique opportunity for New Zealanders to invest in a company that is already playing on the world stage, has a solid reputation globally and boasts more than $5 million in sales to date. Aeronavics is a leader in an industry that is set to be a rapidly expanding multi billion dollar market,” she says.

New Zealand granted the first licences for equity crowdfunding – where the service provider acts as an intermediary between start-up companies offering shares and investors – to Snowball Effect and Pledgeme in July under the Financial Markets Conduct Act.