Big-name VCs, UPS invest $22 million in drone startup CyPhy Works

Helen Greiner of CyPhy Works
Helen Greiner of CyPhy Works

Danvers drone startup CyPhy Works plans to begin selling its drones in the next year and its applications could range from agriculture to public safety, chief executive and founder Helen Greiner said Tuesday.

“We spent a lot of time in technology development and now it’s time to start getting the robots out there,” Greiner said.

The latest $22 million funding round is led by Bessemer Venture Partners, a Silicon Valley firm that has backed big tech successes including Skype, LinkedIn, and Yelp. Other investors include well-known VC firm General Catalyst, Motorola Solutions Venture Capital, and UPS Strategic Enterprise Fund, the investment arm of the delivery company United Parcel Service.

Does that mean CyPhy Works will compete with titans Amazon and Google for package deliveries? “Use your imagination,” Greiner said.

UPS is interested in learning more about supply delivery by drone in disaster response scenarios where infrastructure is destroyed, a spokesperson for UPS said.

Not that the CyPhy Works PARC system will be the robot to do it. As it is currently designed, the PARC can’t carry a load and is tethered to a power and data source, sort of like a kite. But the investment will allow UPS to learn very quickly about an area of technology that is attracting the interest of major competitors such as Amazon.

The service already uses a handful of drones; they just don’t deliver parcels – yet. Rather, they are used in warehouses to peek at inventory on very high shelves. UPS’s research team that studies emerging technologies is also studying flying robots.

This latest investment to CyPhy Works adds to $7 million in venture funding announced by the firm in May 2013. That round was led by Lux Capital, based in Silicon Valley and New York City.

CyPhy Works’ key innovation is a high-altitude drone that can stay aloft for extended periods of time. Tethered to a power source and data connection, it’s intended to withstand weather and winds, and be harder to hack. Greiner said that this “persistent aerial reconnaissance and communications” craft, also known as PARC, can be used by law enforcement and government agencies who want an extended bird’s eye view of a landscape.

The Federal Aviation Administration has begun granting permission for commercial drone flights this year, and CyPhy Works is among the firms that have applied for a permit. Greiner said the new investment will allow CyPhy Works to expand PARC’s use as a tool in even more industries, including agriculture, mining, and construction.

The company also is making a smaller, untethered drone for hobbyist fliers. Equipped with a camera and controlled by a smartphone, the $500 model is intended to serve as a photography tool for families. CyPhy Works collected more than $800,000 in pre-sale orders on Kickstarter earlier this year, soaring over its $250,000 target goal. That drone is expected to go on sale in 2016.

Post updated at 11:27 a.m. to correct the timing of the announcement to Tuesday.
Post updated at 4:04 p.m. to include comments from a UPS spokesperson.

Nidhi Subbaraman writes about science and research. Email her at nidhi.subbaraman@globe.com.
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