His Drone Security Startup Almost Crashed. Now Sequoia’s Investing $16M.

Sunflower Labs CEO Alex Pachikov’s startup almost went under during the pandemic. Now his autonomous drone system is cutting security costs at commercial sites and high-net-worth homes.

Sunflower Labs’s founders hope to spread its drone security systems across corporate rooftops everywhere. Credit: Sunflower Labs

The Upshot

Sunflower Labs CEO Alex Pachikov’s drone security startup was poised for takeoff when it was abruptly grounded.

A startup veteran who had spent nearly a decade at Evernote as a founding team member (his dad, Stepan, was its original creator), Pachikov had earned some early buzz for Sunflower.

Launching from a proprietary charging station (the ‘Hive’), Sunflowers drone (the ‘Bee’) promised an autonomous system that could monitor a high-end home’s property at a cheaper cost than a security guard, and better than fixed cameras.

CES, the consumer electronics trade show, was supposed to be their coming out party in January 2020. Instead, Sunflower found itself struggling to make payroll, and fighting for survival.

But the team of seven that remained – mostly based in Zurich, where Pachikov’s cofounders Christian Eheim and Nicolas de Palézieux live – refused to call it quits. “All of us agreed to keep going until there was no other chance, until we were dead,” Pachikov tells Upstarts. “Maybe even a little bit after that.”

Over 3am phone calls with a translator, they secured and kept a client in Japan, using a prototype Sunflower drone to secure a facility. With free demos and trials, they signed on a couple of Swiss companies; three clients became five.

Slowly and then suddenly, Sunflower – now nine years after its founding – has scrapped its way all the way back.

Customers currently run about 400 patrols per day, doubling each quarter. Its customer base of about 60 mostly large companies includes security firms that resell Sunflower units, like Alarm.com and Alert360, and organizations from Swiss Federal Railways to a real estate firm in Detroit.

With each system costing about $30,000 per year at its most basic, Sunflower claims it can reduce physical security budgets by 5x to 10x; revenue has reached the millions, across customers in nine countries including the U.S., a number of European nations, and most recently, Argentina.

To keep up with demand, including doubling its manufacturing capacity again, Sunflower has now raised $16 million in Series B funding led by Sequoia. Other investors include Alarm.com, DRONE FUND, Gentian Investments, Wakestream Ventures, Atlas Ventures and Daybreak Ventures.

For Sequoia’s leader Roelof Botha, the investment is a personal reunion: he previously backed Evernote, making the Pachikovs the first parent-child duo to each raise for different startups from the storied firm.

But it wasn’t a freebie, either. A number of factors had to break right for Sunflower’s product and timing to resonate with the firm — what Pachikov now calls a feat of perseverance that feels like “somebody’s been walking through the desert, and then someone gave them access to a hydroelectric dam.”

It’s a lesson in survival to product-market fit that feels timely in a moment of startups looking to break out at record speeds. And for Sunflower, the fun part starts now, says Pachikov: “This is the moment that this all becomes real.”

A better deterrent

After his 9-year-plus stint at Evernote wrapped up in 2015 – a period in which he outlasted cofounder and former CEO Phil Libin, now a personal investor in Sunflower – Pachikov had a few ideas for his next move.

Of the five he was considering, Sunflower was the fourth most complex, he says now. “Number five was space garbage cleanup, so I didn’t quite get there,” he jokes.

The others were all productivity tools, and the area no longer excited Pachikov. An amateur drone enthusiast, he and his wife were shaken up by a tragic incident that occurred during this period in the woods behind their Bay Area home, past their cameras.

Speaking with one of his eventual cofounders, Pachikov expressed the sentiment that “It would’ve been great if we had a drone to send out to take a look at what was happening.”

That idea led them to whip up a prototype built from a racing drone; it was only somewhat autonomous at first, but it convinced them to launch a company. Sunflower Labs would raise about $6 million in the following years for a system that at the time used more ground-based sensors combined with a more basic quadcopter drone.

Sunflower’s biggest technical unlock is the base system, which allows its drone to land on its own and take off again within seconds. Sunflower’s technical team would even toss the early version at the base to nail the landing system, even before it could fly.

“Drones are like birds. They feed, they live, they nest in a particular way.”

The company’s tech talent clustered around ETH Zurich, where de Palezieux worked on micro aerial systems during his master’s degree. An open-source autopilot system developed at the university, called PX4, underpins its autonomous flight. (Pachikov says Sunflower is a contributor back to the project.)

Before the pandemic, Sunflower marketed toward residential uses and high net worth consumers. The basic pitch: if you were the kind of person who would pay for security guards, you could use a Sunflower drone system to bolster it, at one-fifth or one-tenth the cost.

The drone wouldn’t be armed with a taser or any sort of aggressive capabilities, but as a more visible camera tracking an intruder, would serve as a deterrent that could also help its user – a homeowner or third-party monitoring service – call authorities as needed.

“A lot of this crime is opportunistic,” says Pachikov. “If they see a drone, it’s a very noticeable thing. We’ve seen footage of people looking up, seeing the drone and running off.”

Sunflower’s CEO is proud that in one high-end community in Bel Air in the Los Angeles area, reported break-ins have dropped to zero, even as incidents continued in non-customer neighborhoods on either side.

A bee… or a bird

For Sunflower to become a viable venture-return type company, it’ll be in manufacturing and commercial use. That’s where there’s more of a security budget – and where the drone’s ability to cover large distances shines.

In a live demo, Pachikov takes control of a drone at the offices of partner home security firm Alarm.com in Salt Lake City, Utah. He commands the drone to go check out a gated dumpster area; the drone confirms its gates are closed, then flies around its vicinity at Pachikov’s instructions to move left or right.

Sunflower Labs – Bee & Hive

One quick stop outside an executive’s office windows later – no broken glass or intruders detected – it nestles back into its rooftop charger.

Companies can use Sunflower’s own library of objects and possible areas of interest, trained off of fine-tuned open-source AI models, and set their own tags of traits or concerning behaviors to trigger alerts. One customer uses the drone to confirm that the correct trucks are parked in parking spots, according to Pachikov.

The trick is in how fast Sunflower activates and can re-activate, the drone launching again just seconds after docking, and a combination of software and high-resolution images that the startup argues are best-in-breed.

Other security firms and drone startups will undoubtedly pitch their own drone security offerings. Pachikov says it won’t be so easy as simply repurposing other drones and tying them to some software to replicate Sunflower, however.

“Drones are like birds. They feed, they live, they nest in a particular way,” he says.

At Sequoia, lead investor Botha says that the startup’s market is only now truly heating up, benefitting from a number of tailwinds: customer momentum, an anticipated FAA rule change allowing drone operation beyond line of sight, and a resurgence of geopolitical-conscious security around industrial sites.

But while Sunflower will face a battle to out-execute the competition to win that market, Botha and Pachikov are both confident that there’s no going back from cheaper, more effective drone patrols.

“I have a hard time envisioning that in a decade’s time, this kind of technology isn’t relatively ubiquitous in helping to secure very large spaces,” Botha says. “It’s very hard to imagine that this doesn’t exist.”

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