KIRKLAND, Wash. — Echodyne, the radar platform company backed by Microsoft co-founder Bill Gates, is announcing its biggest influx of funding to date: a $135 million round co-led by Gates and Baillie Gifford, a high-profile investment management firm based in Scotland.
Other investors include Seattle-based Madrona Venture Group and Vulcan Capital, as well as Northrop Grumman, NEA and Vanedge Capital. Echodyne CEO Eben Frankenberg said the newly announced round brings total investment to $195 million, which makes the trend line for the eight-year-old company’s fundraising efforts look like a hockey stick.
“It’s the hockey stick on the raise, and we hope it’s the hockey stick on the growth of the company,” Frankenberg told GeekWire.
Echodyne is one of several Gates-backed ventures that make use of metamaterials — a type of electronic array that makes it possible to “steer” a flat-panel antenna without moving parts. Frankenberg’s company focuses on compact radar systems that can track drones and other aircraft, or can be installed on drones or autonomous vehicles.
The company’s first-generation product, known as EchoGuard, is already being used for military, border security and law enforcement applications, and for monitoring critical infrastructure. EchoGuard can typically track a DJI Phantom quadcopter at a distance of 1 kilometer, and larger aircraft at greater distances.
Now Echodyne is getting set to roll out its next-generation EchoShield system, which has roughly three times the range of EchoGuard. “There’s a ton of demand for that product, and we have to scale up manufacturing, based on what we expect the demand to be,” Frankenberg said. “We’re getting requests for more software, and we have some different projects in the works there.”
In addition to boosting manufacturing and product development, the newly announced funding round will help Echodyne beef up its sales and marketing staff. Echodyne currently has 130 employees, with most of them working at the company’s Kirkland headquarters.
During a tour of the HQ, we saw a team of engineers huddled inside a van in the parking lot for field testing of the Echodyne’s antennas. We stepped inside the 24-foot-long anechoic chamber where the antennas are checked free of interference. We breezed through office space with plenty of room for new employees, and stopped by the manufacturing lab where the electronics are assembled into radar antennas about the size of jewelry boxes.
“We like to outsource what is easy to outsource,” Tom Driscoll, Echodyne’s co-founder and chief technology officer, explained during the tour. “So our circuit boards are built by Plexus and Sanmina, names like that. And then those circuit boards are turned into circuit cards with populated parts, and they’re tested until we know they’re good. … We do the final assembly of all the circuit cards into a machined metal housing that is built off at a machine shop.”
Echodyne says its metamaterials technology and its lean manufacturing strategy keep the company competitive in a growing market. It’s tricky to do a cost comparison with rival radar manufacturers, but Driscoll said “if you’re doing an apples-to-apples comparison, I would say it’s easily an order of magnitude less.”
In today’s announcement of the funding round, Baillie Gifford investment manager Luke Ward talked up Echodyne’s value proposition:
“Echodyne’s ability to deliver high-performance radar solutions at commercial prices is a highly disruptive innovation,” Ward said. And Baillie Gifford knows a thing or two about disruptive innovation: Among the other companies in its portfolio are SpaceX, Tesla, Alibaba and Moderna.
For now, Echodyne is focusing on counter-drone applications — which are coming into the spotlight in part due to the use of drones in the war between Russia and Ukraine.
“Now we have to worry about $1,000 drones, and that autonomy brings asymmetry to the problem,” Driscoll said. “You can’t defend against $1,000 drones that can be everywhere with a $100 million radar system.”
The company’s current focus is different from the vision that Echodyne had when it was founded. That vision focused on using compact radar systems to help drones detect and avoid obstacles.
“That market has been a little slow to develop,” Driscoll said. “But we continue to be what everybody says is the best solution for that airborne detect-and-avoid application segment.”
NASA put Echodyne’s built-for-drones radar system to the test last year in an exercise that simulated a gas pipeline inspection mission using an autonomous fixed-wing drone.
Further down the line, Echodyne’s radar systems could be used to help guide autonomous ground vehicles. “We think that’s more like a mid-decade market,” said Leo McCloskey, Echodyne’s vice president of marketing. “But what we have in the market right now is more advanced than anything else that’s in the market, and we’ve got some very interesting customers who are toying away with it.”
Frankenberg said Echodyne’s long-term goal is to do an initial public offering. “We’re trying to build the sort of rigor into the company and into the business so that if an IPO is the right thing for the company to do, we’re ready to do it,” he said.
But for now, Frankenberg is grateful to have long-term support from Echodyne’s investors — especially from Bill Gates, who has participated in every funding round since Echodyne was spun out from Intellectual Ventures in 2014.
“He is still very bullish about the metamaterial space and some of these applications that we’re working on,” Frankenberg said. “I think he sees radar as a key sensor in this future world of autonomy, where it’s not just autonomous machines, which obviously we work on … but autonomous systems in general.”
Other Gates-backed ventures — including Kymeta, Pivotal Commware, Lumotive and Evolv — are targeting different segments of the metamaterial market. And last year, Gates teamed up with Intellectual Ventures CEO Nathan Myhrvold to invest in a fund that will back still more metamaterials-based startups.
Driscoll isn’t worried about having more players in the metamaterials game: “This isn’t the end of that story,” he said. “There’s a lot more out there. No need to get greedy and start dividing up the pie we already have.”