Inside the deal: St. Pete company lands seven-figure investment from one of the world’s biggest tech firms
Japanese tech giant SoftBank started out as a customer before it became an investor in 5×5 Technologies Inc., a drone support company in St. Petersburg.
SoftBank pumped $4.4 million into 5×5 in a funding round in August. While 5×5 disclosed the investment in an Aug. 13 filing with the U.S. Securities and Exchange Commission, it did not release the name of the investor until earlier this month.
The new funding will allow 5×5 to accelerate the development of its software-as-a-service platform, said Anne Zink, CEO. It also means 5×5 will expand into international operations, as it undertakes a project with SoftBank to inspect aging bridges, harbors, dams, power plants and towers in Japan, beginning next spring.
5×5, established about two years ago, advises customers on the best platform for commercial drones, or unmanned aircraft systems, to meet their business objectives. It also trains the customer or their drone operator subcontractors on the best flight plan to capture the data required to meet their business objectives.
Additionally, it processes the data collected by drones through its software-as-a-service asset inspection platform. Working with software firm Bentley Systems, 5×5 has created a 3D model that’s imported into a reverse computer-aided design, or CAD, engine. “This allows our customers to both automatically extract data as well as manually analyze the data and then, if desired, export that data back out into traditional 2D Cad environments,” Zink said.
Its first use case has focused on cell phone tower inspections. 5×5 is the preferred vendor of Crown Castle International Corp. (NYSE: CCI), based in Houston and one of the top tower owners in the United States.
With the SoftBank funding, 5×5 will be able to look at new verticals, beyond cell towers, such as the power and oil and gas industries, Zink said.
Zink said a member of 5×5’s advisory board introduced the company to SoftBank.
“One of them had done business with SoftBank Mobile [the company’s Japanese mobile unit] and introduced us to them, in the context of becoming a customer,” Zink said.
SoftBank executives came to the United States and flew with 5×5 to a cell tower for a demonstration of the technology. During the demo, 5×5 was able to show it could measure items on towers within 1/32nd of an inch of accuracy.
“Once they understood the technology, they were interested in investing in us,” she said.
Zink is a disruptive technologies veteran who settled in St. Petersburg in 2013. Through a prior company, she got to know professionals in the legal and accounting community, who she said were a great resource in launching 5×5.
“We are a virtual company now, but it will be easy to attract talent here once we have a brick and mortar headquarters,” she said. “It feels like Tampa Bay is working to become an innovation hub in Florida.”
It’s difficult to get funding for a startup, so Zink is looking forward to events such as the Synapse Summit to help other entrepreneurs learn from her experience. She’s scheduled to be on a breakout panel at the Jan. 23-24 event at Amalie Arena.
She’s also encouraging other startups not to be afraid of working with big companies.
“You often hear about big companies not being supportive of the startup community or that big companies are out to stifle the startups. It’s been the reverse for us. They’ve worked hard to help us figure things out,” she said.
In addition to SoftBank’s investment, she cited Amazon Web Services. “AWS has done so much to help us figure out how to design our architecture, how to scale and be cost-effective,” Zink said.
