00:00but just explain how you're interpreting uh that that ruling as well yeah certainly i mean china
00:07owns the entire global drone industry and it's actually even more specific than that dji is
00:15effectively the monopoly player in this space so them not being able to bring future drones into
00:22the country is an enormous tailwind for us and frankly for every u.s drone and component
00:29manufacturer and so what sort of demand are you expecting to see out of this because obviously
00:37it doesn't apply to to they're not going to be backdating it any any any business unit or or
00:42service that's already acquired these drones can continue to operate them but but what do you think
00:47in terms of your business outlook for next year what extra demand are you expecting to see
00:53we're expecting to see significantly more demand um you are of course completely correct you know
01:02this is not a decision that's going to apply to the current in market you know mavic drones or
01:07matrice drones but the drone industry moves very quickly and systems become obsolete after not too
01:15much time so uh over the course of the next couple of years you know dji's current in market systems
01:21will go out of production and they'll become obsolete and they'll be replaced by airframes
01:26that are manufactured by us and other companies that are based in the u.s okay blake i'm going to
01:32ask you because you know obviously on bloomberg we like specifics can you actually quantify this for us
01:36either in percentage terms or the actual dollar figure how much more you're actually expecting to
01:41make out of this i mean i i would say next year it'll mean eight figures easily for for us
01:49up from what it is currently which is roughly what can you tell us also the proportion of the market
01:59that you guys are cornering right now and in terms of a three-year horizon how much more is that
02:06going to look like yeah yeah certainly i mean you know at this point our business is really focused
02:14on building city-wide nine one response drone networks for our customers so we put drones in
02:22recharging stations on top of police and fire station roofs and then connect all of that technology
02:28in with computer-aided dispatch so the second someone calls nine one we grab you know the gps
02:35coordinate associated with that emergency launch a drone flies at 60 miles an hour right there and
02:40then when it arrives it can deliver personal flotation devices defibrillators you know narcan
02:46other emergency medical payloads tell police officers what a person is holding before they arrive on scene
02:52you know spot hot spots and structure fires for the benefit of fire departments and execute on a whole
02:59bunch of other similar missions and uh historically you know the first cities to adopt this kind of
03:05thing have utilized chinese systems and having to ongoingly compete with a state-sponsored organization
03:13like dji as an organization that uh like ourselves that is operating under normal free market conditions
03:21it's it's just been really challenging so i think that this is an action that is going to result in
03:28ourselves skydio other drone manufacturers in america being you know ultimately more competitive
03:35in in that market and uh getting the opportunity to partner with more public safety agencies while also
03:41building up a supply chain and a manufacturing muscle that over time will be very important for national
03:48security on that note when it comes to competition maybe now it's not about dji it's also between u.s
03:58manufacturers what is that going to mean for perhaps the need for fundraising are you quite
04:03comfortable with where things are at the moment i would say we welcome competition with non-state-backed
04:11entities you know that that is what has given me heartburn historically when um when you're up against
04:18the entire chinese government financially you're just not going to win unless you know um that's an
04:25advantage that's neutralized by a similar level of state support on our side which the the federal
04:30government just hasn't executed on so you know where that leads me is yeah we're gonna have to compete
04:37with other u.s drone companies and that is totally fine and healthy and uh as things should be in terms
04:46of our fundraising ambitions um we certainly have them i mean this new government action uh is going
04:54to be a structural tailwind for our business and i think it makes a lot of sense for us to bring
05:01more capital on to go after you know our current core business of serving public safety as well as
05:07we humanly can but looking to the future maybe also start to serve other drone industry verticals that
05:13need a secure supply chain yeah let's just in terms of that fundraising though when would you start
05:20to initiate that fundraising round and how much would you be looking to raise and are you as well
05:25have you got any sort of ipo plans in the pipeline yeah i mean candidly i would say folks have already
05:32started reaching out i mean people track this kind of news um our cash position is really strong it
05:38hasn't been that long since you know we we fundraised before so we'll have to see how conversations
05:44progress our last round was a 75 million dollar raise prior to that we uh brought on 55 million the
05:52round prior to that was 25 and the round prior to that was was two so i um i would expect us to raise
05:57you know materially more than 75 this time around if we do end up executing on a process at this at this
06:04point
06:04blake you talked about some of these uh verticals when it comes to the drone market how much of an
06:17opportunity do you see in the defense sector and what might that look like for your business
06:21sure yeah i mean listen the war in ukraine has proven to the world that drones are the future
06:31of of conflict um that is obvious there are you know a number of u.s manufacturers that are highly
06:40focused on to serve on serving defense customers um i would say that historically we haven't been
06:47one of them you know our mission is really uh today building the best possible technology for
06:52first responders and you know helping those folks save lives in the context of emergency situations
06:58and you know working on defense technology can sometimes come into conflict with with that goal
07:05but i do care about democracy continuing to exist so um we'll you know we'll continue thinking about
07:15these issues and uh make plans to do more work in in that space as it as it makes sense i just want
07:22to pick up again on that uh that that point around the competition with other u.s companies
07:27you were saying or we were just discussing in the ad break around your supply chain you're not working
07:34with any chinese suppliers directly so that could be an advantage to you but but what do you know
07:41about others in the u.s u.s companies are they also free of chinese supplies okay maybe not the the
07:47you know full transparency across the supply chain but but where do you stand on that front do you think
07:53i i would say there's a lot of diversity on that issue um brink has been sanctioned by china i'm also
08:03personally sanctioned so i can't enter that country anymore which was uh not an outcome i expected from
08:10starting this organization and most other prominent drone manufacturers including skydio are in a
08:18similar situation um many i would say many u.s drone companies transitioned away from a chinese
08:25supply chain uh prior to the sanctioning activity in order to achieve what's called nda compliance which
08:32allows our systems to be sold to federal end users and certain state and local end users
08:37uh but post-sanction you know it became even more necessary for ourselves and other companies
08:44in a similar situation to you know move away from a chinese supply chain and it's been really hard
08:50you know all of the companies that you would generally want to work with to build a drone company
08:56to build a drone system you know are based in china so when you can't work with any of those
09:02organizations what it really means is you have to vertically integrate a lot more than you might
09:08expect because there either aren't organizations in the free world building the parts that you need
09:14or they're so small and immature it's just challenging to work with them uh if if you're
09:20manufacturing drones at a moderate scale so it's been a big project for us it's been a big project for
09:26other companies in our space uh some have succeeded at you know executing on that others haven't are or
09:34are in process and uh i do think that this will be you know one of the highest gates that have to be
09:40climbed in order for companies to really be successful domestically and uh engaging in in a business like ours
09:47in a business like ours
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