Year: 2020

Hightouch, a SaaS service that helps businesses sync their customer data across sales and marketing tools, is coming out of stealth and announcing a $2.1 million seed round. The round was led by Afore Capital and Slack Fund, with a number of angel investors also participating.

At its core, Hightouch, which participated in Y Combinator’s Summer 2019 batch, aims to solve the customer data integration problems that many businesses today face.

During their time at Segment, Hightouch co-founders Tejas Manohar and Josh Curl witnessed the rise of data warehouses like Snowflake, Google’s BigQuery and Amazon Redshift — that’s where a lot of Segment data ends up, after all. As businesses adopt data warehouses, they now have a central repository for all of their customer data. Typically, though, this information is then only used for analytics purposes. Together with former Bessemer Ventures investor Kashish Gupta, the team decided to see how they could innovate on top of this trend and help businesses activate all of this information.

“What we found is that, with all the customer data inside of the data warehouse, it doesn’t make sense for it to just be used for analytics purposes — it also makes sense for these operational purposes like serving different business teams with the data they need to run things like marketing campaigns — or in product personalization,” Manohar told me. “That’s the angle that we’ve taken with Hightouch. It stems from us seeing the explosive growth of the data warehouse space, both in terms of technology advancements as well as like accessibility and adoption. […] Our goal is to be seen as the company that makes the warehouse not just for analytics but for these operational use cases.”

It helps that all of the big data warehousing platforms have standardized on SQL as their query language — and because the warehousing services have already solved the problem of ingesting all of this data, Hightouch doesn’t have to worry about this part of the tech stack either. And as Curl added, Snowflake and its competitors never quite went beyond serving the analytics use case either.

As for the product itself, Hightouch lets users create SQL queries and then send that data to different destinations  — maybe a CRM system like Salesforce or a marketing platform like Marketo — after transforming it to the format that the destination platform expects.

Expert users can write their own SQL queries for this, but the team also built a graphical interface to help non-developers create their own queries. The core audience, though, is data teams — and they, too, will likely see value in the graphical user interface because it will speed up their workflows as well. “We want to empower the business user to access whatever models and aggregation the data user has done in the warehouse,” Gupta explained.

The company is agnostic to how and where its users want to operationalize their data, but the most common use cases right now focus on B2C companies, where marketing teams often use the data, as well as sales teams at B2B companies.

“It feels like there’s an emerging category here of tooling that’s being built on top of a data warehouse natively, rather than being a standard SaaS tool where it is its own data store and then you manage a secondary data store,” Curl said. “We have a class of things here that connect to a data warehouse and make use of that data for operational purposes. There’s no industry term for that yet, but we really believe that that’s the future of where data engineering is going. It’s about building off this centralized platform like Snowflake, BigQuery and things like that.”

“Warehouse-native,” Manohar suggested as a potential name here. We’ll see if it sticks.

Hightouch originally raised its round after its participation in the Y Combinator demo day but decided not to disclose it until it felt like it had found the right product/market fit. Current customers include the likes of Retool, Proof, Stream and Abacus, in addition to a number of significantly larger companies the team isn’t able to name publicly.

AWS today announced the preview of Amazon Location, a new service for developers who want to add location-based features to their web-based and mobile applications.

Based on mapping data from Esri and HERE Technologies, the service provides all of the basic mapping and point-of-interest data you would expect from a mapping service, including built-in tracking and geofencing features. It does not offer a routing feature, though.

“We want to make it easier and more cost-effective for you to add maps, location awareness, and other location-based features to your web and mobile applications,” AWS’s Jeff Barr writes in today’s announcement. “Until now, doing this has been somewhat complex and expensive, and also tied you to the business and programming models of a single provider.”

At its core, Amazon Location provides the ability to create maps, based on the data and styles available from its partners (with more partners in the works) and access to their points of interest. Those are obviously the two core features for any mapping service. On top of this, Location also offers built-in support for trackers, so that apps can receive location updates from devices and plot them on a map. This feature can also be linked to Amazon Location’s geofencing tool so apps can send alerts when a device (or the dog that wears it) leaves a particular area.

It may not be as fully-featured as the Google Maps Platform, for example, but AWS promises that Location will be more affordable, with a variety of pricing plans (and a free three-month trial) that start at $0.04 for retrieving 1,000 map tiles. As with all things AWS, the pricing gets more complicated from there but seems quite reasonable overall.

While you can’t directly compare AWS’s tile-based pricing with Google’s plans, it’s worth noting that after you go beyond Google Map Platform’s $200 of free usage per month, static maps cost $2 per 1,000 requests.

After a number of pricing changes, Google’s mapping services lost a lot of goodwill from developers. AWS may be able to capitalize on this with this new platform, especially if it continues to build out its feature set to fill in some of the current gaps in the service.

 

Now more than ever both the importance and limitations of the global delivery infrastructure are on full display. But while Amazon and others try to speed up last mile delivery using drones, Dash Systems hopes to expedite the middle mile — with military-inspired airdrops putting pallets of parcels down at their penultimate destinations, even in the most inaccessible of locations.

Air-based delivery generally consists of four steps. First, an item is taken from the warehouse to the airport. Second, it goes by well-packed large cargo planes from there to another major hub, say from New York to Los Angeles. Third, a truck or smaller plane takes these to their regional destination, a sorting or distribution facility. Fourth, they go out on the familiar delivery trucks and end up on your doorstep.

It’s that third step that Joel Ifill, founder and CEO of Dash, felt could be improved. With an engineering background and experience building guided bombs for the military, he felt that there was an opportunity to apply some of the military’s point-to-point approach to the commercial sector. Why do you need to land at all?

“We should be able to do one-day deliveries anywhere in the world,” he told TechCrunch. “And when I say anywhere, I mean like the tip of Alaska. We’re already using airplanes, why do we have to have a billion dollar airport to get it there?”

The problem, he said, is that the military style of delivery (for airdrops, anyway, not smart bombs) isn’t particularly precise: “Great for storming the coast of Normandy, but not for landing in the parking lot of a post office. We thought we could engineer a solution that was both precise and useful on a commercial basis.”

What they came up with is perhaps best thought of as skydiving packages that can be dropped at multiple destinations in a single flight. “We call them pods,” Ifill said. “They have control surfaces and a tail kit, and then a method of slowing down and landing. It’s a turnkey solution you can load in the back of any plane.”

Each pod can handle about 50 pounds of payload right now, which isn’t very much in the cargo world, but of course there can be as many of them as you want loaded in there.

But the pods are only part of the equation. The company is taking over a whole segment, and that means telling the pilot exactly where to go. The team focused on making it as simple as possible so very little training was required — all the pilot needs to do is get to the coordinates indicated by the system. And because there’s no need to land, the plane can deliver pods over a huge range. The Dash system calculates the best route and the pods, upon being released at their appointed coordinates, will get themselves where they need to go.

The hope is that this will simplify the middle mile situation where slow ground vehicles or costly, fuel-guzzling aircraft are the only options. My concern that the whole concept sounded a bit expensive was met with understanding from Ifill and Bryan Miller, the company’s COO and chief pilot, who also has a a background in military air operations and engineering.

“Air cargo isn’t an intuitively understandable space,” Ifill admitted. “It accounts for less than half a percent of shipped weight, but a third of shipping income. It’s primary value proposition is speed, not efficiency. The average utilization of cargo craft is less than 50 percent.”

“The rural use case is easy to get,” said Miller, noting the difficulty and delays of delivering to rural communities in Alaska. Getting from the airport in Anchorage to a small post office in the bush is a huge challenge, but if planes could take off from Anchorage and just drop a pallet each on five small airports or helipads, that reduces perhaps dozens of hours of driving — if the roads are even open — to a single flight. And it’s a relatively safe and cheap one at that because you cut down on takeoffs and landings at airports where any number of Alaska’s charms may be in play: fog, ice, moose, wind, and all the rest.

But the there are lots of other places in the lower 48, Miller noted, that can’t get Amazon’s 2-day delivery, for example, because the infrastructure simply isn’t there to complete the four steps listed above in that timeframe. But if the Prime packages went on a plane from SFO that would otherwise be only half full, and gets dropped on the roof of a FedEx center on the way to the Petaluma airport, it saves everyone time and money.

Commercial contracts are all well and good, but the idea actually got its start in the aftermath of Hurricane Maria, where in Puerto Rico, Ifill said, people had gone nearly two weeks without any deliveries because the communications infrastructure was so devastated. “We had to hike in with a satellite phone to ask the mayor what they needed,” he said, but actual delivery was a 45 minute flight from San Juan. If commercial air drops had been part of the existing system, it could have made things a lot easier.

So the company will continue pursuing the use case of helping reach destinations rendered temporarily inaccessible by disasters — but the main thing that will make it a successful business is augmenting the existing setup to make remote locations easier to deliver to. Ifill didn’t seem to think that going up against giants like FedEx and UPS was a problem.

“No new delivery lane has ever made an old one go out of business,” he said. This may very well increase their business. “We’re competing against the status quo — we don’t have a patent on gravity or throwing things out of airplanes, but to my knowledge we’re the farthest along.”

“We don’t want to own any aircraft,” said Miller. “We want to collaborate with all the companies already out there.”

Amazingly, the regulatory piece is not a big deal. You would think that dropping heavy items from airplanes near residences would be hard to get a permit for, but it’s actually all included in existing regulations. The pods aren’t considered drones, crucially, so they don’t have to register as such. So far they’ve dropped 5,000 pounds of cargo in their Alaka pilot flights.

The $8 million seed round was led by 8VC, with participation from Tusk Venture Partners, Loup Ventures, Trust Ventures, Perot Jain, and MiLA Capital. It should help scale the team, Ifill said, and further develop the deployment and pod tech, which is functional but far from finalized. They already are looking at some commercial and government contracts for their first customers — as you can imagine, despite the military doing this for years, it’s a useful tool have available to some remote outpost or facility.

You can learn a bit more about Dash in the video below.

T-minus 3…2…1…liftoff! Day one of TC Sessions: Space 2020, our first conference dedicated to space technology, early-stage startups and the brilliant minds forging a new era of space exploration, is officially underway.

Get ready for two days of interviews, panel discussions, fireside chats and breakout sessions with the space industry’s mightiest movers and shakers — technologists, investors, founders and key government officials. Connect and network with attendees from around the world. Discover trends, emerging technologies, sources of funding — talk about a galaxy of opportunity!

Ready to fire your booster rockets? Here are just some of today’s events you don’t want to miss. Check out the complete event agenda to plan your day. Pro tip: The agenda will automatically reflect the time zone in which you’re currently located.

Fast Money — SMC Space Ventures, AFWERX and Space Force Accelerators: Learn how these agencies work together to connect startups to government organizations and resources in the space industry. Col Ryan M. Colburn (USAF), Craig “Yogi” Leavitt (AFWERX), Gabe Mounce (Air Force Research Laboratory) and Matt Tompkins (The Aerospace Corporation).

Pitch Feedback Session: Join us for a pitch feedback session open to all startups exhibiting at TC Sessions: Space 2020 moderated by TechCrunch staff.

Bridging Two Eras of Human Spaceflight: When Kathryn Lueders started working at NASA in 1992, it was the peak of the Space Shuttle era. As she begins her leadership of the Human Spaceflight Office this year, a new and exciting era is just beginning. Lueders will discuss the possibilities and challenges of the new systems and technologies that will put the first woman and the next man on the surface of the Moon…and perhaps Mars. Don’t forget to submit your questions for Kathryn Lueders (Associate Administrator, Human Exploration & Operations Mission Directorate, NASA).

University Showcase — Boldly Innovating in Space, for Space (Part One): This session showcases Aerospace Corporation partners USC and MIT, as they provide insight into their space programs. They’re joined by university partners UCLA, ASU and Caltech, showcasing a range of emerging space technologies. Working with the Aerospace Corporation, these emerging capabilities can be evaluated and integrated into government space-faring missions for communicating, navigating, and exploring in space with NASA, NOAA and the Air Force. Randy Villahermosa (The Aerospace Corporation), Dr. Richard Linares (MIT), David A Barnhart (USC).

That’s just the tip o’ the rocket, folks. Check out all the presentations and be sure to stop by the expo area to meet innovative, up-and-coming startups. Go. Explore everything day one at TC Sessions: Space 2020 offers — including a universe of opportunities waiting to be discovered.

No pass yet? We don’t judge — you can still buy your pass now for instant access to the space race for as little as $50.

There are now so many wireless earbuds, it’s hard to keep track, but one of the reasons why we’ve seen this explosion in new and existing manufacturers entering this business is the availability of Bluetooth Audio SoCs from Qualcomm, including the QCC5100 and QCC30xx series. Today, the company is launching the latest chipset in its wireless portfolio, the QCC305x.

Unsurprisingly, it’s a more powerful chip, with four more powerful cores compared to the three cores of its 304x predecessor. But the real promise here is that this additional processing power will now enable earbud makers to offer features like adaptive active noise cancellation and support for using wake words to active Alexa or the Google Assistant.

The new chipset now also supports Qualcomm’s aptX Adaptive with an audio resolution of up to 96kHz and aptX Voice for 3-microphone echo canceling and noise suppression for clearer calls while you are on the go (or on a Zoom call, which is more likely these days). And despite the increased power, Qualcomm promises all-day battery life, too, though, at the end of the day, it’s up to the individual manufacturer to tune their gadgets accordingly.

The new chipset has also been designed to support the upcoming Bluetooth LE Audio standard. This new standard hasn’t been finalized just yet, but it promises features like multi-stream for multiple synchronized audio streams from a single device — useful for wireless earbuds — and support for personal audio sharing, so that you can share your music from your smartphones with our people around you. There’s also location-based sharing to allow public venues like airports and gyms to share Bluetooth audio with their visitors.

It’s still early days for Bluetooth LE Audio, but during a press conference ahead of today’s announcement, Qualcomm continuously stressed that its new chips will be ready for it once the standard is ratified.

“Not only do our QCC305x SoCs bring many of our latest-and-greatest audio features to our mid-range truly wireless earbud portfolio, they are also designed to be developer-ready for the upcoming Bluetooth LE Audio standard,” James Chapman, vice president, and general manager, Voice, Music, and Wearables at Qualcomm, said in the announcement. “We believe this combination gives our customers great flexibility to innovate at a range of price points and helps them meet the needs of today’s audio consumers, many of whom now rely on their truly wireless earbuds for all sorts of entertainment and productivity activities.”

Today we’re digging into the IPO pricing of Upstart and Wish, perhaps the final fintech and e-commerce debuts of the year. Both unicorns priced last night and will begin trading this morning.

But first, a programming note: The Exchange will publish through next Tuesday before taking a break until 2021; the last newsletter of the year will go out this weekend. And, just while we’re here, Equity will continue to drop, with some special episodes being compiled this week.

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The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.

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Ok, enough with all of that! For what could be the very last time this year, let’s discuss IPO pricing and what the public market is telling us about these two offerings.

Recall that we are in the wake of three IPOs that performed so insanely well that two anticipated debuts — Affirm and Roblox — decided to delay going public until they could get more confident about their pricing. So, Upstart and Wish had bonkers pricing runs, right?

No, as it turns out.

What is this middle-of-the-road pricing?

I forgive you if you’ve gotten so accustomed to IPOs raising their range and pricing above the boosted interval that you’ve forgotten that it doesn’t always happen. Because it doesn’t always happen.

BigID has been on the investment fast track, raising $94 million over three rounds that started in January 2018. Today, that investment train kept rolling as the company announced a $70 million Series D on a valuation of $1 billion.

Salesforce Ventures and Tiger Global co-led the round with participation from existing investors Bessemer Venture Partners, Scale Venture Partners and Boldstart Ventures. The company has raised almost $165 million in just over two years.

BigID is attracting this kind of investment by building a security and privacy platform. When I first spoke to CEO and co-founder Dimitri Sirota in 2018, he was developing a data discovery product aimed at helping companies coping with GDPR find the most sensitive data, but since then the startup has greatly expanded the vision and the mission.

“We started shifting I think when we spoke back in September from being this kind of best of breed data discovery privacy to being a platform anchored in data intelligence through our kind of unique approach to discovery and insight,” he said.

That includes the ability for BigID and third parties to build applications on top of the platform they have built, something that might have attracted investor Salesforce Ventures. Salesforce was the first cloud company to offer the ability for third parties to build applications on its platform and sell them in a marketplace. Sirota says that so far their marketplace includes just apps built by BigID, but the plan is to expand it to third party developers in 2021.

While he wasn’t ready to talk about specific revenue growth, he said he expects a material uplift in revenue for this year, and he believes that his investors are looking at the vast market potential here.

He has 235 employees today with plans to boost it to 300 next year. While he stopped hiring for a time in Q2 this year as the pandemic took hold, he says that he never had to resort to layoffs. As he continues hiring in 2021, he is looking at diversity at all levels from the makeup of his board to the executive level to the general staff.

He says that the ability to use the early investments to expand internationally has given them the opportunity to build a more diverse workforce. “We have staff around the world and we did very early […] so we do have diversity within our broader company. But clearly not enough when it came to the board of directors and the executives. So we realized that, and we are trying to change that,” he said.

As for this round, Sirota says like his previous rounds in this cycle he wasn’t necessarily. looking for additional money, but with the pandemic economy still precarious, he took it to keep building out the BigID platform. “We actually have not purposely gone out to raise money since our seed. Every round we’ve done has been preemptive. So it’s been fairly easy,” he told me. In fact, he reports that he now has five years of runway and a much more fully developed platform. He is aiming to accelerate sales and marketing in 2021.

The company’s previous rounds included $14 million Series A in January 2018, a $30 million B in June that year and a $50 million C in Sept 2019.

A group of major U.S. news publishers have joined the Coalition for App Fairness (CAF), the advocacy group pushing for increased regulation over app stores and fair treatment for all developers. The publisher trade association now joining CAF is Digital Content Next, a representative for the AP, The New York Times, NPR, ESPN, Vox, The Washington Post, Meredith, Bloomberg, NBCU, The Financial Times, and many others. The organization is now the 50th member for CAF and the first to represent the news and media business in the U.S.

It joins other media organizations who are already CAF members, including the European Publishers Council, News Media Europe, GESTE, and Schibsted, as well as CAF founding members like Basecamp, Blix, Blockchain.com, Deezer, Epic Games, Match Group, Prepear, Protonmail, Skydemon, Spotify, and Tile, plus a growing number of smaller developers.

DCN’s members, combined, reach an audience over over 223 million unique visitors and 100% of the U.S. online population, it says. Its publishers provide access to content on a subscription-based model that, according to its statements, Apple “severely impacts” by serving as an intermediary. The organization’s argument is that Apple forces publishers to use in-app payments for services like subscriptions. As a result, some publishers need to raise their prices to account for the so-called “Apple tax,” or commission, on these purchases.

“DCN is pleased to join the Coalition for App Fairness working to establish a fair and competitive digital landscape,” said DCN CEO Jason Kint, in a statement. “The premium publisher members of DCN enjoy trusted, direct relationships with consumers, who don’t expect intermediaries to impose arbitrary fees and rules which limit their ability to consume the news and entertainment they love.”

Digital Content Next (DCN) had already spoken out against Apple’s business practices following this year’s congressional hearings when it was revealed that Apple had, in fact, bent its App Store rules for Amazon in a special arrangement.

The House Judiciary Committee’s investigation discovered how Apple had negotiated an agreement with Amazon over its Prime Video App for iOS and Apple TV. In an email dated November 2016 — before the launch of the Prime Video app for Apple TV in 2017 — Apple had agreed to take only a 15% revenue share on customers who signed up for the app using Apple’s payment mechanisms. At the time, apps had to pay a 30% commission, which dropped to 15% in year two for subscription-based apps. Amazon was getting a reduced commission from day one, however.

Apple had also agreed to waive its normal 15% fee for all existing Prime Video subscribers, and it allowed customers to use other payment systems outside of Apple.

In short, Amazon got a deal that essentially all publishers want for themselves, even as Apple touted that its App Store rules applied evenly to everyone.

DCN had also argued that, in addition to its concerns over some companies getting special deals with Apple, Apple’s fees and Safari’s blocking of third-party cookies and tracking workarounds were pushing publishers away from direct audience revenues, like subscriptions and events. It said Apple was instead pushing them back toward digital ads where they didn’t have to pay a 30% commission on their earnings.

After the Congressional hearing, Kint wrote to Apple CEO Tim Cook, asking him to publicly disclose the terms of Amazon’s agreement so anyone meeting the conditions could apply for the same deal with Apple.

In November 2020, Apple responded to outside pressure by reducing fees to 15% for all apps with under $1 million in revenue through a new program aimed at small businesses. But larger publishers would not qualify for this reduced cut, as their revenues are much higher.

“Having DCN join the Coalition for App Fairness is a landmark moment for our campaign, and their insight into core issues with the App Store that top outlets face will only make our voice stronger,” said Sarah Maxwell, spokeswoman for the Coalition for App Fairness, in a statement. “We’re excited to work with them to advocate for App Store policies that are fair, hold Apple accountable, and give consumers freedom of choice,” she added.

 

 

The startup opioid use disorder therapy service Bicycle Health will soon be available to patients in half the country, just three years after its launch in 2017, according to founder Ankit Gupta.

A serial entrepreneur whose last company, Pulse News, was acquired by LinkedIn back in 2013, Gupta left the LinkedIn in 2016 (around the time of the Microsoft acquisition) to pursue something more meaningful. He settled on trying to find a better way to address the opioid addiction epidemic, which was responsible for more than 42,000 deaths the year he left LinkedIn.

By 2018 deaths from overdoses would exceed 47,000, according to data from the US Department of Health and Human Services.

And the problem isn’t going away. Bicycle Health’s statistics indicate that 92 million Americans are potentially at risk for developing opioid use disorder and 2 million Americans are already diagnosed as opioid addicts.

Initially, the company worked out of a clinic in Redwood City, Calif., but as the COVID-19 pandemic took hold in the US earlier this year and forced treatment facilities to undertake preventative measures to stop the spread of the disease, Bicycle Health began adopting virtual treatment methods.

Under new regulations delivered by HHS, many therapies and drug treatments that had only been available in-person were able to be distributed remotely. The change caused an explosion in remote care services and companies like Bicycle Health rushed to capitalize.

The company is currently offering treatment options in 18 states and is on track to be available in 25 states by the end of the first quarter of 2021.

Backing that growth are a slew of individual and institutional investors led by the venture investment firm, Signalfire, which led Bicycle Health’s seed round. In all, the company has raised roughly $5.5 million from investors including Signalfire, Hustle Fund, Romulus Capital, and individual investors like Jeff Weiner, the former chief executive of LinkedIn; Sami Inkinen, the founder of Virta Health; Rushika Fernandopulle, the founder of Iora Health; and John Simon, the co-founder of General Catalyst through his Greenlight Fund.

Bicycle Health both prescribes buprenorphine as a medical treatment and offers a team of health coaches to address the behavioral and mental health issues attendant with detoxifying.

There are three health coaches on staff to manage the care of the company’s current roster of 2,000 patients and those coaches are bolstered by 12 clinical support specialists, Gupta said.

Treatment is delivered and managed through the company’s mobile app, and is supplemented by regular in-home diagnostic testing to monitor a patient’s progress, according to Gupta.

Working with Goodrx, the company has been able to drive down over-the-counter costs for patients who don’t have healthcare, and Gupta said that Bicycle Health would be working with local and national healthcare providers to try and defray as much of the costs as the company can. 

“We want to subsidize the costs as much as possible for our patient,” he said.  

The goal, Gupta said in an interview with TechCrunch earlier this year is “making sure that this industry is making sure that they’re helping people make a change instead of keeping them stuck.”

And although Gupta comes from a software industry whose guiding principle has been to move fast and break things, he realizes that healthcare doesn’t work that way. “Move fast and break things is the wrong mindset for healthcare,” he said. “You have to build a safe space … and i don’t mean a safe space legally but a safe space where patients can be served.”

ZeroAvia, the company that’s on a mission to move the world to zero-emission, hydrogen-fueled flight, has just received some corporate jet fuel in the form of a new $21.4 million cash infusion.

The investment came from the Bill Gates-backed Breakthrough Energy Ventures and the Ecosystem Integrity Fund,  which led the company’s latest round, alongside previous investors Amazon Climate Pledge Fund, Horizons Ventures, Shell Ventures, and Summa Equity.

Aviation is a huge contributor to the carbon emissions that cause global warming, and the industry, along with shipping will be one of the hardest to decarbonize. Electrification technologies have yet to account for ways to propel aircraft or move massive seafaring vessels, and a consensus is emerging among technologists that Hydrogen will be the best solution to ensure zero emissions flight can become a reality.

“I’m a big believer in hydrogen from the perspective that if I have enough zero carbon hydrogen, and it’s cheap enough, then I can do anything,” said Eric Toone, the executive managing director and science lead Breakthrough Energy Ventures. 

Industry backers think that ZeroAvia may also be the ticket to solving many of the aviation industry’s problems. The company has established a partnership with British Airways and received a $16.3 million grant from the UK government to ensure that its 19-seat hydrogen-electric airplane is ready for the market by 2023.

Longtime investor Shell Ventures doubled down on its commitment to ZeroAvia with this round, on the back of the company’s unique approach to integrating various proven technologies to bring hybrid hydrogen-electric flight to market.

“Each individual component is not unique in a sense. The powertrain is not unique, the fuel system isn’t unique… [But] bringing it all together in a system, is not just technically getting a plane in the sky but having those conversations with regulators about what do we need to change and all the steps involved in getting to a commercial play,” said Paul Bogers, the vice president of Hydrogen at Shell. 

ZeroAvia is now developing and testing the certification-ready ZA-600 powertrain, which can fly a 10-20 seat aircraft up to 500 miles, the company said. And earlier this year the company completed the first commercial-scale battery electric flight and the first flight of a hydrogen fuel cell powered aircraft in September. The company said it would expect to complete a long-distance flight of 250 miles within the next three months.

For Val Miftakhov, the founder and chief executive of ZeroAvia and a serial entrepreneur whose last company, eMotorWerks, was sold to Enel, the flights prove out his thesis that hydrogen power is the answer for the aviation industry.

“Our most recent milestone achievements are closing the gap for the airline industry to begin its transition away from fossil fuels. In fact, over ten forward-looking airlines are now gearing up to implement our powertrains when they are ready in 2023,” said Miftakhov said in a statement. “Both aviation and the financial markets are waking up to the idea that hydrogen is the only meaningful path towards large-scale, zero-emission commercial flight. Powering a 100-seat plane on hydrogen is not out of the question. We feel deeply grateful to our top-tier investors for joining us in the next phase of our exciting journey; to bring in a new golden age of aviation.”

The key to the company’s success is the realization that using existing electrolyzer technologies, natural gas can be converted into hydrogen which can be used to power the aircraft’s systems, Miftakhov said.

“We manage fuel supply,” Miftakhov said. “We’ve done that already at the airport in Cranfield. We make our own fuel from electricity and water. We are not building new technology in the hydrogen manufacturing space. We’re utilizing partners on the electrolysis side.”

The company is working with Enapter to provide the electrolyzer for now, and expects to deploy larger systems at other airfields in the UK and US as part of its ongoing demonstrations.

“The scale of consumption allows you to economically make fuel on site. That’s the game changer for hydrogen,” Miftakhov said. “You don’t have to transport it.. You can’t liquefy it.. You don’t have to worry about transporting it because it’s a low density fuel.. It’s a mess.. If you make it on site all of those challenges go away.. We think infrastructure is going to be fine.”

It was Miftakhov’s experience building eMotorWerks that led him to explore hydrogen as the solution for the aviation industry. “Batteries aren’t energy dense enough for the amount of energy you need for the aircraft,” he said. “Aviation is the most energy intensive form of transit… and you can’t stop in the middle.”

Initially, the company will go to market with retrofits for the 10 to 20 seat aircraft in use on short haul flights across Asia and the Caribbean, Miftakhov said.

However, the company has relationships with seven of the biggest aircraft manufacturers in the world who are working on ways to integrate the company’s powertrains into their aircraft, Miftakhov said, and the company is on track to integrate into large passenger planes like an A320 oer a 737 by the end of the decade.

Transitioning to a hydrogen fleet is going to take more than the technical ability of a new breed of manufacturers though, Miftakhov said. It will also require government intervention.

“By 2050 everybody wants to be zero emission and net zero. [But] we are already too late. 2050 is one vehicle lifetime away. The governments are going to come in and say we’re going to force the acceleration of the vehicle generation turnover,” he said.

Miftakhov wants to be ready when that regulation happens. The company has signed letters of intent with operators to retrofit over 100 aircraft already. And has laid the groundwork for working on new types of aircrafts.

For corporate investors like Amazon who have committed to decarbonize by 2040, the innovations and industry adoption can’t happen quickly enough.

“Amazon created The Climate Pledge Fund to support the development of technologies and services that will enable Amazon and other companies to reach the goals of the Paris Agreement ten years early—achieving net zero carbon by 2040,” said Kara Hurst, VP Worldwide Sustainability, Amazon. “ZeroAvia’s zero-emission aviation powertrain has real potential to help decarbonize the aviation sector, and we hope this investment will further accelerate the pace of innovation to enable zero-emission air transport at scale.”