No VC, no problem.
Airship AI, an under-the-radar tech startup that didn’t raise a single dime of investment, will soon become a publicly traded company after clearing SEC regulations this week for its SPAC deal.
The Redmond, Wash.-based company traces its roots to 2003, when co-founders Victor Huang and Derek Xu took the startup leap together. They dabbled with different ideas, survived the recession, and landed on the current iteration of Airship AI in 2010.
It’s been a long journey for the bootstrappers. “We are survivors,” Huang told GeekWire on Tuesday.
Not having pressure from venture capitalists looking for exponential growth and a big exit may have been a blessing.
“When you bootstrap, you get to try on your own dime and your own timeframe,” Huang said. “Nobody is going to rush you.”
Airship AI — not to be confused with Portland, Ore.-based mobile marketing company Airship — sells software that uses computer vision and artificial intelligence to analyze data from cameras and sensors at the “edge.” The object detection and recognition technology helps companies address security and operational needs.
Customers include Fortune 500 companies such as FedEx and Home Depot, as well as federal government agencies.
Huang, 54, and Xu, 66, went through various iterations of video-related software products over the past two decades. Most of them didn’t pan out, but the entrepreneurs were able to stay in the game long enough.
“We just put our heads down and persevered,” Huang said.
They tried to raise money along the way, but investors declined. It worked out in the end.
“I’d rather get money from a customer than an investor,” Huang said.
“We just put our head down and persevered.”
Using advancements in AI-powered video processing and edge computing tools, Airship AI has carved out a niche. It sells a small hardware device called Airship Outpost that encodes video and a web application called Acropolis OS that manages surveillance systems.
Airship AI estimates the combined edge AI hardware and software market to reach $7 billion by 2029.
The company competes with a number of other video analysis providers such as Ambarella and Visidon.
Huang said Airship AI differentiates by focusing intensely on customer service. “We’ve never lost a single customer,” he said.
Airship AI reported $8.1 million in revenue through the first nine months of 2023, down nearly 40% from the year-ago period, with a net loss of $6.5 million. But Huang said the company still expects to outperform its 2022 metrics. It entered 2023 with $162.9 million in its sales pipeline, according to regulatory filings.
The SPAC deal with BYTE Acquisition Corp. values Airship AI at over $200 million.
Also known as blank check companies, SPACs form with the intent of acquiring a private company in order to take it public. SPACs re-emerged during the pandemic in a big way, as capital flowed freely and entrepreneurs used the financial instruments to more quickly enter the public markets.
But the performance of post-merger SPACs steadily dropped throughout 2022 amid the larger market slowdown and a record number of deals were spiked. There were 613 SPAC deals in 2021; just 29 have been completed this year, according to SPAC Insider.
Airship AI and BYTE execs believe taking the company public is essential for the nature of its business, particularly to cater to government clients and open up opportunity for larger contracts.
“We believe a public listing will provide Airship AI with enhanced visibility, selling opportunities and financial flexibility to perform to its business plan and broaden its customer base,” BYTE CEO Sam Gloor said in June.
Gloor is a longtime investment banker and founder of Sagara Group, which advises growth-stage companies. Kobi Rozengarten, chairman of BYTE, is a former managing partner at Jerusalem Venture Partners, a leading Israeli venture capital firm.
Airship AI has 47 employees across offices in Redmond, Charlotte, N.C., and Taiwan. The company will trade on the Nasdaq under the ticker AISP.
The company’s other executives include President Paul Allen, a former IBM exec and Green Beret with the U.S. Army Special Forces, and CTO Yanda Ma, who joined Airship in 2005.
