Autonomous electric aircraft startup Pyka is working hard to expand its line of crop dusting and cargo aircraft, but it has attracted a lucrative new suitor: the Pentagon. The promise of climate-friendly, dual-purpose autonomous aircraft is too big for investors to resist, leading to a new $40 million B round.
Pyka started in 2019 with a focus on crop spraying, a business that you may not have heard of personally, but is important and very old. The company’s lightweight, compact electric Pelican aircraft is designed to autonomously spray crops over large areas, relieving human pilots or remote operators of dangerous and tedious tasks.
The aircraft has been used briefly as a passenger aircraft, but the company decided in 2022, after raising funding, that a cargo version of the Pelican would be more practical in the short term.
“We went from rendering to first flight in about 10 months, which is exciting. It’s really fast,” says Michael Norcia, co-founder and CEO. Their primary focus at the time was inter-island commerce, a market typically served by slow boats and older aircraft that were expensive and had long lead times. A small autonomous aircraft that could quickly jump over puddles every day carrying 400 pounds of cargo could make a difference for many island communities.
But the truck model caught the attention of a customer Norcia hadn’t yet thought was actually possible: the Department of Defense.
“When we first built the product, our focus was purely on commercial use cases. We realized pretty quickly that there was a lot of interest and need for the product in the defense industry,” Norcia said. “That surprised us.”
“We always wondered if our class of vehicles would have a place in defense logistics,” he explained. “Would they be big enough? Would they be OK if they couldn’t float? But I think the war in Ukraine changed the way everyone thought about autonomous systems and logistics and problem solving in defense. It wasn’t clear when we started, but it’s 100 percent now. of course Logistics will be automated!”
The shift in military and general government procurement is tilting toward cheaper, more flexible solutions that exist today, rather than “sophisticated” systems built to specifications with eight-figure price tags that may exist five years from now. And it’s not hard to imagine the utility of fleets of cargo-carrying drones.
Pyka is not a military contractor, so they have been working with aerospace veterans Sierra Nevada to make the kinds of changes necessary to make these aircraft useful in a battlefield or contested environment. He said the changes are mostly electronic. They do not add guns or armor. The military version is called Rumrunner.
Norcia admitted that deciding to undertake the defensive mission was not an easy decision.
“That conversation came up pretty broadly early on. It’s not how everyone in the company wants to spend their day, and it’s something I’ve tried to think about,” he said. “The good news is that logistics automation has some pretty positive externalities. I’m all for moving stuff with robots that might get shot down by other robots, whereas the status quo is people in vehicles getting shot down by other people.”
He pointed out that there is a long history of government and military subsidies for R&D in the aerospace sector, which is true. In fact, many people are surprised to learn that a vast amount of basic research across many fields is funded through Department of Defense grants.
“There’s an existential element to it. Aviation is not a very trivial industry to be in. High regulatory barriers, extremely high risk—both of which are not good news for early-stage startups trying to make money,” Norcia said. In other words, they weren’t necessarily in a position to say no. “Most of our aircraft deliveries and imports are to defense partners today, and we expect that to continue. I think the commercial use case is going to look increasingly compelling over a five- to 10-year horizon, but it’s still regulatory-constrained.”
That doesn’t mean they aren’t trying. Their commercial efforts are ongoing, and the new funding will help them scale up manufacturing after years of tweaking and improving the design based on customer feedback.
Despite freezing the passenger aircraft market, Norcia said all of its work would ultimately contribute to that market.
“We’re making progress!” he said. “That’s still our North Star. We want to be successful in industrial use cases and leverage that data advantage and cash flow to build a vehicle that can carry passengers. That’s still the legacy we want Pyka to have.”
The $40 million B round was led by Obvious Ventures, with participation from Piva Capital, Prelude Ventures, Metaplanet Holdings, and Y Combinator.
