Night-vision startup Tonbo bags multimillion dollar contracts

Discussion in 'Defence & Strategic Issues' started by Yusuf, Nov 15, 2015.

  1. Yusuf

    Yusuf GUARDIAN Administrator

    Mar 24, 2009
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    Defence is a tough business to crack, unless you are one of the biggest defence contractors. Tonbo Imaging, a startup backed by Artiman Ventures of the U.S., has done just that. The Bengaluru-based maker of advanced night vision systems has won multimillion dollars contracts by building cutting edge technology products. Tonbo now has a pipeline of orders worth more than $50 million (Rs.331 crore) from Indian and international customers including DARPA, an advanced-technology branch of the U.S. Department of Defense. Its products are being used on observation platforms, reconnaissance drones, and artillery and naval weapon systems. “The fact that our technology was embraced by all these agencies has given us the thrust to leapfrog foreign competitors,” said Tonbo founder Arvind Lakshmikumar, whose startup won these contracts after competing alongside large defence firms such as Thales, Elbit and Tata Group. “Our investment in indigenous research and development and engineering is starting to pay off,” he said.

    According to Mr. Lakshmikumar, the firm has reached an ‘inflection point’ this year. He said the company was valued at $200 million (Rs.1,324 crore).

    It expects to cross revenue of about $26 million (Rs.172 crore) this year.

    “This makes us one of the largest privately held electro-optics companies in the world and the largest in India,” said Mr. Lakshmikumar, an alumnus of BITS Pilani and Carnegie Mellon University.

    Tonbo, which is the only indigenous manufacturer and exporter of thermal imaging-based devices, is currently on every electro-optics and night vision programme of significance in India, both in the Ministry of Home Affairs and the Ministry of Defence.

    Rajiv Chib, Director for Aerospace and Defence Practice at PricewaterhouseCoopers, said it has been an ‘uphill task for startups’ to make a mark in the Indian defence market. Most of them usually work with the Defence Research and Development Organisation (DRDO) and defence public sector units as sub vendors, he said.

    Tonbo had moved up the value chain by directly providing its products to the Ministry of Defence, Mr. Chib said, adding that it had been able to make inroads in the Indian defence market as it also serves international customers.

    “Tonbo’s model should be emulated by other Indian startups as well,” he said.

    Iron Man

    Tonbo's technology has gained traction from various defence ministries and forces in countries such as Singapore, France and Turkey. “I am quite fascinated with the folks at Tonbo. Arvind (Lakshmikumar) is like Tony Stark from the Iron Man. He and his team churn out pretty cool new technologies,” said General (retd.) Lucas Arnold, who has been a customer of Tonbo, while serving as a commander with NATO. General Arnold is now again a customer of Tonbo’s surveillance systems through the U.S.-based security firm Chevronstar, where he serves as Chairman. “High end night vision is a serious business and I have not seen technology like this emerge from places outside of a few classified labs in the U.S.,” said General Arnold.

    Mr. Lakshmikumar, 39, previously worked at firms like Intelligent Automation, Honeywell and Sarnoff in the U.S. There, he built various imaging innovations for large defence contractors such as Boeing and Lockheed Martin. He was also a part of government-funded programmes such as Future Combat Systems intended to prepare the U.S. Army for modern warfare.

    He then returned home and in 2008 started Tonbo, which means dragonfly in Japanese. It is now the only Indian company whose night vision systems will be featured for the Indian Navy’s 12.7 mm remote controlled gun platforms.

    The Navy will deploy the platform on ships to fight against pirates and terrorists. Mr. Lakshmikumar said Tonbo had also become the electro-optics supplier of choice to bidders on the Indian Army’s Futuristic Infantry Combat Vehicle programme. The almost $10 billion (Rs.66,210 crore) project is slated to be the largest indigenous defence programme.

    Backed by marquee investor Artiman Ventures, Tonbo has offices in Bengaluru, Palo Alto and Singapore. With the help of about 85 employees, it builds and deploys advanced imaging and sensor systems such as smart cameras that sense, understand and control complex environments. To put that in perspective, these systems allow soldiers to see during day and night, through fog and foliage, and do real-time interpretation of battlefield environment. General Arnold of Chevronstar said that since night vision technology was a highly restricted item, any company that builds them was under scrutiny from technology watchers and policy makers.

    “Their name does the rounds in these circles frequently.”

    Europe’s largest defence contractor BAE Systems, auto-parts maker Visteon Corp and Autoliv are also Tonbo’s customers.

    “Their product design is far from the traditional low-cost Indian products,” said Bien Thng, an executive at defence contractor and customer Pretech.

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