
Deal focus: Tonbo looks to move beyond defense
WRV Capital is backing Tonbo Imaging, a provider of night vision technology to the Indian military, as it expands into new markets
India’s armed forces currently use more than 350 drone systems made by ideaForge Technology for surveillance and reconnaissance duties in support of counter insurgency activities, hostage situations and crowd management. The size and stability of this customer base was one reason WRV Capital joined a $10 million Series A round for the company last December.
The same combination of technology and government contracts brought the Silicon Valley-based VC firm to lead a $17 million Series B round for night vision specialist Tonbo Imaging. Half of Tonbo’s revenue comes from the Indian military, which uses the company’s systems for weapon sights. Qualcomm Ventures, Edelweiss Private Equity and existing backer Artiman Ventures also took part in what is described as the largest-ever VC investment in India’s defense sector.
“Tonbo has enterprise customers and is backed by the government – once you’re there it’s difficult to be displaced,” says Ganapathy Subramaniam, a venture partner at WRV. In addition, the company also works with ideaForge, building payloads for drones.
Arvind Lakshmikumar, Tonbo’s founder and CEO, was completing his doctoral studies in robotics at Carnegie Mellon University when he met Takeo Kanada, one of the foremost authorities on computer vision and robotics. Lakshmikumar ended up working for US-based video and vision technology player Sarnoff Corporation, before buying out the company’s India assets in 2008. That was the starting point for Tonbo. Kanade serves on the company’s board.
Tonbo has a staff of more than 170 computer vision and machine learning specialists and products deployed across 25 countries. In addition to the Indian military, it supplies security and surveillance technology to Singapore, Taiwan, the Middle East and Peru.
The new funding will go towards global expansion and product development. Tonbo is keen to move into the automotive sector with driver assistance systems that integrate thermal imaging, video and automatic scene analysis.
Other companies in the defense sector globally, such as Flir, DRS, Raytheon and Thales, are also looking to develop more products for consumer markets. However, Subramaniam believes Tonbo has an edge from an R&D perspective because its existing defense and security portfolio is built on consumer hardware.
“They have democratized the system,” he says. “Other companies in this space are vertically integrated, they build entire systems based on their own intellectual property. Tonbo goes with the best consumer-grade integrated circuits, sourcing chipsets from Qualcomm and Nvidia. This means products are lower cost but also high quality.”
Subramaniam adds that Tonbo represents a new generation of Indian start-up. The country has produced successes in business services and e-commerce; what comes next is high-tech. “They would be no different from Silicon Valley or Israel-based start-ups,” he explains.
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