An H3 Dynamics’s airship under development
Singapore-based H3 Dynamics is no longer a simple startup; it has grown to become a “mini-conglomerate” with four emerging standalone businesses, each run by independent leadership.
Since winning Echelon 2019, the aerial mobility company has raised significant investments, expanded into multiple geographies, and partnered with many MNCs. It also has contributed to tackling climate change by developing energy loss identification solutions in high-rise buildings, replacing diesel generators used on boom lift equipment with scanner drones, and developing zero-emission hydrogen propulsion solutions/hydrogen power generators.
H3 Dynamics has grant plans to take the company to the next level. We spoke with its Founder and Group CEO, Taras Wankewycz, to learn about these plans.
Excerpts:
You raised US$26M in a Series B investment round in November 2021. How have you grown since this round? Did you add any new clients/products to your portfolio?
In November 2021, we completed the rolling-close financing round of US$26 million [from investors, including Japan’s SPARX Mirai Creation Fund (lead), EDBI, Capital Management Group, and French strategic investors ATEQ] that began in 2018. So, we have been investing capital gradually and much earlier and growing step by step.
Our software team in Singapore has tripled in size, and our AI-enabled building maintenance digitisation tool was launched in 2019, growing revenue 100 per cent every year since then.
Also Read: H3 Dynamics closes US$26M Series B to introduce long-range hydrogen-air logistics solutions
H3 Dynamics has acquired over 50 regional and global scale clients in the real estate sector, becoming a market leader in Asia with over 4,000 high-rise buildings already processed.
We also built a dedicated robotics tech team. In 2022, it launched a charging station for remote drone operations, with our first shipments completed to Europe, the US, and Australia.
Besides, we also globalised our operations with our aerial power system R&D in the US and Europe.
What started as company business units are now becoming companies with their own leadership teams, clients, and product lines, developing independently under one Singapore holding structure.
All in all, H3 Dynamics is currently looking like a mini-conglomerate.
Please tell us more about the four different business units.
Our Singapore-based real estate maintenance management software business, H3 Zoom, targets facilities management companies, repair contractors, civil engineering firms, inspection firms, building owners, developers and insurance companies.
We also have a robotics company in the city-state that works on drone automation stations addressing energy utilities, solar farms, mining, oil and gas, agriculture and critical site security.
Our US-based small hydrogen power and refuelling systems company targets unmanned aircraft manufacturers in the civilian and defence sectors.
At the same time, our France-based larger-scale hydrogen propulsion and infrastructure company addresses aircraft OEMs, airports, and MRO companies.
You are into a capital-intensive business. Do you plan to raise Series B-plus/pre-Series C round soon? Is it challenging to raise capital for a growth-stage company like H3 Dynamics?
It has been challenging. We are in a deeptech B2B sector bringing solutions that apply pioneering technologies. In the past few years, we had to compete for capital with fast-growing coffee shop chains, online clothing retail ventures, and crypto ventures.
Unfortunately, investors in our region tend to stay away from growth-stage high-tech engineering and science-based companies, which present different revenue timelines and growth profiles. Such companies need patient investors that value hard innovation. So we have focused our fundraising abroad (in Japan, Europe, and the US) with no choice but to expand out of Singapore.
We are now closing a Series B extension round at the holding/group level and preparing to start raising capital at our subsidiary-level companies in the coming weeks.
You partnered with Thales for a real-time autonomous drone flight monitoring system in January 2021. How has this partnership played out? Do you expect to announce more such big partnerships moving forward?
We are working closely with Thales in Europe right now. We use a former military airfield near Paris they manage for our flight tests.
The goal is to keep progressing the airspace integration topic using cybersecurity solutions that can be trusted by civil aviation authorities globally, where Thales has been leading the market for decades already.
Taras Wankewycz
This being said, we have partnered with many other companies across different industries and geographies. Unfortunately, we cannot reveal all of them due to confidentiality agreements.
Also Read: FROGS wants to become the first startup in SEA to fly passenger drones
In recent months, we announced technology partnerships in the liquid hydrogen space (primarily in the waste-to-hydrogen space).
In the robotics domain, we partnered mostly with resellers abroad, and we are just about to reveal a cornerstone partnership in the software space.
Are there any new products in the development stage?
We are developing new products, focusing on sustainability and reducing carbon emissions.
Buildings generate slightly more CO2 émissions than all the transport/mobility combined. So we now have applied our AI and thermal imaging technologies to find energy losses in buildings, especially those that use air conditioning.
On the hardware side, we scaled up our capability from powering drones to powering planes. We just confirmed government funding in France to develop the first hydrogen propulsor nacelle system.
H3 Dynamics is also in the process of developing new zero-emission alternatives to diesel or kerosene power generators.
How has the company been growing in the downturn? What has been the impact of the current recession on your business?
Luckily, our product lines target productivity improvements, energy savings in sectors looking to reduce operating costs, and sustainability solutions that are top of mind for our clients.
Aviation is a booming industry post-COVID-19, and thus we see a lot of demand in our target markets. The only challenge is financing for growth, so we must be cautious. We are still heavily reliant on external capital to continue our development.
Do you plan to take your products to more geographies?
H3 Dynamics has been developing the Japanese market for the past two years and hope to open local operations there now that local clients and resellers are activated. We have a growing base of Japanese investors, and Japan is one of our key target markets in the APAC region. Some big announcements are planned in March on this topic.
Otherwise, we have grown our European and US client base; we expect to ramp up in Australia in the coming 18 months.
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Echelon Asia Summit 2023 brings together APAC’s leading startups, corporates, policymakers, industry leaders, and investors to Singapore this June 14-15. Learn more and get tickets here. Echelon also features the TOP100 stage, where startups can pitch to 5000+ delegates, among other benefits like a chance to connect with investors, visibility through e27 platform, and other prizes. Join TOP100 here.
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