Drone safety bound ParaZero will complete its ASX listing this week
Drone safety and mitigation is becoming a flourishing industry that has understandably grown up in parallel to the growth in drone adoption amongst both commercial entities and consumers.
ParaZero (ASX: PRZ) completed its public listing today but must wait until Friday, 22 June before its shares will be made available for trading after the ASX confirmed that “no matching or auctions will take place today”.
ParaZero was first founded in 2014 and after several years of development, the company has developed a novel product that offers significant drone security and mitigation. The company’s listing comes alongside the growth of reported drone incidents now reaching around 260 per day in the US alone.
Whereas in the past drones were mainly used by only handfuls of people (typically in the defence sector), today they are quickly becoming as ubiquitous as mobile phones or DVD players with affordability now making drones a popular choice for Christmas presents.
In the commercial sector, drones are experiencing even stronger adoption rates as various companies continue to adopt drones to deliver exclusive functionality that improves business margins, operating conditions and reduce costs – depending on the application.
As just a handful of examples: insurance companies are using drones to inspect damaged assets while farmers are sending them to monitor crops and collect soil data. Even more dramatic changes could be in store as drone operators adopt drones to explore ground-breaking applications such as product delivery services for retail stores and air taxis for commuters.
According to market research firm McKinsey & Company, the US has been a particularly strong source of commercial growth, with the value of drone activity rising from US$40 million in 2012 to US$1 billion in 2017. Its research team said that by 2026, commercial drones will have an annual impact of US$31-$46 billion on the country’s GDP.
Other Western nations such as Australia, the UK and Europe are following suit on the back of strong business investment and high disposable incomes.
Zeroing in on commerce in drone safety
ParaZero was admitted to the ASX on 14 June and is now in the final stages of completion that will see its shares going public at the end of this week.
Its service offering is centred around improving the safety of drone operations with a heavy focus on bystanders and safeguarding often-expensive drone hardware that can weigh as much as 300 kilograms per unit.
The Israeli company raised A$5 million in an initial public offer by issuing 25 million shares at $0.20 per share.
ParaZero’s flight path so far has seen the company growing its business and taking its total revenue from $125,000 in 2015 to $540,000 at the end of last year.
However, its costs have also climbed over the period, with its research and development costs rising from A$715,000 in 2015 to A$977,000 last year. Overall, ParaZero’s operating loss has grown from A$870,000 in 2015 to almost A$2 million in 2017.
ParaZero says it specialises in the design, development and manufacturing of drone safety solutions for commercial drones with its technology able to fit any drone. Its listing is expected to propel the company’s fortunes significantly in both its research and development but also sales and revenues.
Its “SafeAir safety box” independently monitors the flight operation of the drone which in case of drone failure, triggers a patented ballistic parachute to provide a controlled descent rate, warns bystanders underneath and communicates with a ground-based unmanned traffic system to maximise the safety of bystanders and drone hardware.
According to ParaZero, it has already sold more than 1,400 systems to various commercial drone operators with its “key customers” including Lufthansa, DJI, Ewatt, Skysapience and ECA.
ParaZero said it plans to spend around $1.7 million of the cash raised as part of its ASX listing on research and development projects and around $1.4 million on sales and marketing.