Elroy Air has raised $40 million Series A financing, which includes funding from Lockheed Martins venture capital arm. This will allow it to accelerate the development, testing, and validation of its autonomous cargo drone.Marlinspike Capital, Prosperity7 and existing investors Catapult Ventures, DiamondStream Partners Shield Capital Partners, Side X Side Management and Precursor Ventures participated in the funding round. Elroy's total to date has reached $48 million with this latest round.The four-and-a-half-year-old company was founded by David Merrill and Clint Cope. Merrill stated in a recent interview that the two of us founded the company with the dual insight that the technology was possible, that we could build larger drones []and that there would be many useful things that larger systems can support.Elroy's VP strategy and business development Kofi Asante calls a dual-use system that can be used for both defense and commercial markets. Chaparral, Elroy's flagship autonomous cargo plane, can fly 300-500 lbs of cargo and has automated flying and cargo handling capabilities. It is designed to reduce the human involvement in manual loading and unloading of cargo, not just from the pilot's seat.Chaparral, unlike other competitors in this space, is hybrid electric. It has all-electric propelsors and a generator. As a way of increasing power to the rotors, the generator is mostly used during take-offs and landings, which are both energy-intensive.Its propulsion system is the key difference between Elroy Airs product, and other companies building eVTOL air taxis like Joby Aviation. Elroy Air CEO David Merrill stated that customers wanted longer distances and longer range missions than the current battery technology could support. We realized that we needed an alternative power supply plan for a vehicle.Elroy has also decoupled the cargo pod and drone using the automated cargo handling function. This is a major difference from other VTOLs. The drone can automatically pick up and drop off cargo using a combination GPS and sensing technology. This design maximizes efficiency and allows humans to pack and stage cargo pods.This capability could prove to be particularly useful in defense settings as missions such as resupply for soldiers may pose risks to pilots, crew and cargo handlers.Merrill stated that there is a general interest in having better logistics and automation. This shift from large, expensive aircraft you don't have a lot of to smaller, more affordable aircraft you can have more.There are a few next steps that the company must take before it can fly for commercial or defense customers. Elroy will start flight validation next year with the U.S. Air Force, and the Navy. A Phase 3 Small Business Innovation Research contract has been awarded to the company via Agility Prime. This contract includes flight operations with these next systems.It would be possible for the company to open commercial operations in other countries, if they meet the different regulatory standards. Then, it will need to go through the certification process in the U.S. with Federal Aviation Administration. Before it can begin building its domestic business, it will need both a Part 135 and Type Certificate. They are open to selling Chaparral systems to other companies, as well as operating Chaparral systems themselves as a full-service cargo airline.With small drones for last mile delivery, drone delivery has seen rapid growth. Merrill stated that middle mile delivery is now possible. We are excited about the technology being available to support this. Customers want it and we have built the team and the funds to pursue it.
