(Bloomberg) -- Saudi Aramco’s early-stage investment fund is backing a Japanese startup that develops software for drones, as the world’s biggest oil company pursues new technologies.
State-backed Saudi Arabian Oil Co.’s Wa’ed Ventures said it will invest $14 million in Tokyo-based Terra Drone Corp., which designs software to help drones inspect and monitor pipes, tanks and other confined spaces. It’s the $200 million fund’s first investment in East Asia.
Wa’ed Ventures targets technologies it believes could bring new business to Saudi Arabia, which seeks to diversify revenue sources beyond oil. The fund is betting that Terra Drone will localize technological development in Saudi Arabia and help achieve Crown Prince Mohammed Bin Salman’s ambition to make the country a local hub for advanced technologies.
With a portfolio of more than 50 companies, Wa’ed Ventures is part of a national push to step up tech investments. Aramco owns another investment arm called Aramco Ventures, which manages bigger funds including the $1 billion Prosperity7 fund. The kingdom’s Public Investment Fund recently increased its stake in gaming giant Nintendo Co., while making a sizable investment in South Korea’s Kakao Entertainment Corp.
The Japanese startup plans to use the money to set up an office in Saudi Arabia and help drones conduct inspections of Saudi Aramco’s oil and gas plants and tanks, said Terra Drone Director Teppei Seki. The company wants to hire 100 people there in two to three years, he said. Founded in 2016 as an affiliate of electric motorcycle maker Terra Motors Corp., the company now has offices in the Netherlands, Belgium and Indonesia.
“We are extremely keen to expand our business to the Middle East,” Seki said in an interview. “This investment places us on the map as one of the world’s top drone companies, something we needed to launch us into the global market.”
Drones are used in a wide array of situations: military attacks, aerial surveillance, image and video mapping, search and rescue, parcel delivery, oil rigs and power line monitoring and precision farming. While China’s SZ DJI Technology Co. has become the largest maker of consumer drones, Terra Drone generates much of its revenue by helping companies map forest terrain and inspect pipelines, storage tanks, flare stacks and other hard-to-access equipment.
©2023 Bloomberg L.P.
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