South African aerospace startup Cloudline has secured $6 million in funding as it aims to lead the global frontier of carbon-free autonomous flight.
Schmidt Futures, the The philanthropic business founded by former Google CEO Eric Schmidt and Wendy Schmidt is a seed-round investor. Other supporters include pan-African funds such as Raba Partnership, Verod-Kepple Africa Ventures, 4Di and other venture firms.
When the founder and CEO of Cloudline Spencer Horne started the company six years ago, he intended to build a transportation system that would connect isolated communities to the global supply chain with deliveries of large payloads using lighter-than-air aerial vehicles.
Horne’s interest in this moonshot project stemmed from his childhood fascination with trains and his broader passion for transportation technology, especially aviation, influenced by growing up near a railroad crossing in South Africa—and despite challenges he continued pursuing aeronautical studies in the US, Horne, a Harvard Alum, returned to the continent to contribute to the field.
Horn spent two years at McKinsey to build his professional network, which provided him with valuable travel experiences and insights into the diverse challenges facing African communities. Work in East Africa, particularly Kenya and Uganda, highlighted the essential impact of infrastructure on people’s lives.
2016 was pivotal as drone delivery services targeting rural African consumers were taking off. Zipline has started drone deliveries in Rwanda, while Matternet is testing in Lesotho. The following year, Horne founded Cloudline at the intersection of technology, transportation and its impact on community outcomes.
Horne, in an interview with TechCrunch, said he wondered why these drone operators were involved with small single-dose deliveries or only delivering medical payloads. Horne’s view at the time was that there was an opportunity for drones to move objects that could create real economic opportunities for Africans and bypass traditional infrastructure constraints.
“I had finished my degree in mechanical engineering and was already inclined towards technology, so I leaned into it and went down the rabbit hole – a bit. And I realized that technology doesn’t scale linearly in complexity with its size. If you want to build a bigger drone, sooner rather than later you’re going to end up back with a plane or a helicopter with all the cost and complexity,” Horne said.
“So the drone players stayed in that area because getting out of it was too big a hardware game. It got too expensive and too complicated. And then I turned the question around: “So the drones did this amazing job because we shrunk helicopters and airplanes. What if we shrink something else that we can also reach, like make hardware easier, build on the power of software, and scale autonomously to unlock the opportunity?” And that was really when I landed on airships.”
Horn and his team invested considerable time in developing the necessary flight equipment designed for airships, and it was only three years ago that he found an MVP. Fast forward to today, and the startup, which now employs more than 25 people per LinkedIn, has improved its understanding of the opportunities in autonomous flight, Horne said in the interview.
For example, the team has found interest and resonance with partners interested in aerial surveillance, a time Horn said he initially dismissed as an opportunity due to developments in DJI’s satellite and mobile drone technology. Therefore, Cloudline has identified specific areas where its application, offering real-time data over long distances or extended flight times for large areas, meets critical needs. According to the CEO, this realization revealed a great opportunity for the startup to expand the use of its platform in these applications.
Cloudline airship. Image Credits: Cloudline
Cloudline has created autonomous airships that provide a cost-effective alternative to drones, helicopters and satellites, bringing real-time data capture to hard-to-reach and expensive-to-serve locations. The main advantages of these airships lie in their range, endurance and efficiency.
The startup says its airships can cover more than 400 km (250 miles) with a fully loaded payload of 40 kg (90 lbs) and operate for 10 hours, making it ideal for various applications such as mapping, surveillance and public safety .
These carbon-free airship cruise flights are powered by helium gas for lift and powered by solar energy, supplemented by battery backup, resulting in zero emissions and significantly reduced running costs. Both resources give Cloudline an advantage over alternative vessels, as partners can increase range without the need for larger aircraft or higher unit operating costs such as fuel, addressing previously difficult tracking challenges.
“So it’s a breakthrough in that sense. The way we think about it now, just as a technology, is that this platform game can change the game in a lot of ways. For example, accessing areas that are typically either harder to reach or becoming incredibly expensive to service,” commented Horne.
“So once we get out of the urban density, whether it’s suburban, rural or like completely remote, or nowadays in the increasing case where places are hit like natural disasters, this is a platform that is able to bring those places back within reach and budget, because the bottom line is that it can be built cheaply here in South Africa and it doesn’t burn fuel.”
Cloudline operates in a relatively uncompetitive market due to its focus on hardware. While other drone operators within the autonomous infrastructure airspace might create some competition if they venture into airships, Horne emphasizes that Cloudline’s first-mover advantage gives the startup a strong position in the market.
According to him, Cloudline’s strongest intellectual property lies in the integration of software with hardware, particularly in creating autonomy for airships. He argues that replicating this time-consuming process in the field is a significant challenge for any potential competitor, even with significant financial resources. Furthermore, he says that the success or failure of drone companies does not depend on the functionality of their drones but on their ability to generate value for customers through a sustainable business model.
Cloudline’s approach to this challenge is evident in its strategy of developing solutions in Africa for the continent as an initial customer base and leveraging these use cases to enter the global market. This approach is beneficial, especially in regulatory interactions, as regulators have shown they are open to working with the Cape Town-based startup despite the innovative nature of its work.
The six-year-old aerospace startup has quickly gained traction among customers such as government institutions looking for a platform capable of carrying various payloads, particularly multi-sensor payloads for aerial surveillance. Unlike conventional drone flights that use individual sensors for specific types of data, Cloudline says it combines optical, infrared, lidar and other sensor data in one flight, creating a comprehensive data overlay. Utilities with linear infrastructure such as power lines, pipelines, railways and roads can combine detection for maintenance and safety.
“We’re seeing serious interest from people in nature conservation, whether it’s nature reserves, coastal monitoring or reforestation, who – ironically and often painfully – are faced with the tough spot of relying on hydrocarbon-fuelled aircraft to do their jobs” , Horne said. “We are zero-emissions now and will continue to take advantage of developments in green energy to extend our range and the capabilities of our aircraft.”
Horne says the startup has begun commercial operations in South Africa, where it has completed the process of regulatory approvals. It is also actively working on expanding into neighboring countries, Namibia and Mozambique, before venturing into global markets. Earlier in the year, Cloudline conducted test flights for authorities in Kenya, marking it as the first airship to fly in East Africa. According to him, Cloudline saw a 4x revenue growth during 2023, and the startup predicts significant growth for 2024, driven by several new multi-million dollar business contracts.
George Rzepecki, founder and CEO of Raba Partnership, speaking about the investment, said his company was excited to support Horne, who “has brought together some of the world’s top engineering and product talent, building a class-leading company in the autonomous airspace infrastructure.”
