Romania entrepreneur aims to put home-grown UAV defence technology industry on the map

Romania entrepreneur aims to put home-grown UAV defence technology industry on the map
Autonomous Flight Technologies (AFT) military drone Hirrus / Autonomous Flight Technologies (AFT)
By Raymond Martin in Bucharest April 17, 2018

bnePeople Romania Radu Negulescu UAV TMT AFT Radu Negulescu is always looking for acquisitions that could mesh with the e-government company he runs.

But the 30-year-old Romanian entrepreneur would never have guessed that a potential deal in Africa would lead to him becoming a partner in a unmanned aerial vehicle (UAV) company in his homeland.

Searching for a UAV operation to help his African client, he became so impressed with Romania’s Autonomous Flight Technologies (AFT) that he decided to help turn it into a major player in Europe. And it is this project, he said, that has the potential to put Romania on the map of the world’s most innovative defence and military technology-producing countries. So Negulescu bought a 50% stake in AFT.

Negulescu began looking for business opportunities as a 14-year-old go-getter. He started his first money-earning venture the same year and incorporated his first business at 16. Too young to register his own company under Romanian law, he used a friend’s name to get around the legal age restrictions and hired his first employees at 18.

Today, Negulescu’s company, Trencadis, has ridden innovative e-government solutions to success in Romania and elsewhere. His company was recently named Romania’s fastest growing business, with a growth rate of 700% over the past three years. Both FT and Inc. Magazine included the company in their 2018 lists of Europe’s fastest growing companies. And Deloitte included Trencadis in its ranking of Central Europe’s Technology Fast 50.

It has also made Negulescu an anomaly — a successful Romanian entrepreneur who doesn’t have gray hair. He is quick to point out that, despite being only 30, he has earned his stripes, however: he has been running a business for 16 years — more than half of his life.

The story of Negulescu’s acquisition began when a Romanian business colleague introduced him to officials in a West African country that wanted to develop a land management system.

Many developing countries lack record-keeping systems that show who owns, which pieces of property. This creates all kinds of problems, from deciding who can develop a parcel of land, and how, to who needs to pay taxes on it, and how much. It can also make it difficult to manage valuable public resources such as forests and watersheds.

A number of countries are getting a handle on the problem by hiring information technology companies like Negulescu’s to develop computerized land management systems. But to create a computer-based parcel identification and classification system, you need raw data — such as aerial photos of the land.

The most efficient way to obtain these pictures from an economic point of view, Negulescu realized, was with UAVs. So he cast about for a company that could do it for his African client. And he found one in a suburb of his home town, Romania’s capital of Bucharest.

When he realized how good AFT’s technology was, he decided to take an ownership position in the company — a transaction he completed in mid-March 2018.

He and his partners — AFT founders Emanuel Popp and Ionel Mindru — have come up with a step-by-step strategy to transform the 30-person company into Europe’s flagship commercial and small tactics UAV manufacturer, with an eye toward licensing its technologies on the US market.

It includes creating all of its UAV technology in-house, focusing on defence applications at first, and having companies with global reach help market its products once it has achieved the manufacturing prowess it wants.

Negulescu may be young, but he is in no hurry to rush a business opportunity or cut corners to boost profitability. He knows that the massive accumulated flight time of the company’s UAVs and their best-in-class technology would already make an attractive offer for venture capital firms in Silicon Valley and London. But he doesn’t want external investment at all, and is taking a strategic, long-term approach to developing AFT, with his ultimate goal to make it an anchor industry for a thriving Romanian defence sector based on innovation.

“One of AFT’s big advantages,” he told bne IntelliNews, “is that it creates all of the technology on its own.”

Many UAV makers, especially those in Europe, use other companies’ components in their products, rather than making them all themselves, he said. “They are technology integrators,” he noted.

From its inception in 2004, AFT decided to create everything itself. One reason was to prevent it from being held hostage to the quality — or lack of quality — in other companies’ components.

bneCompany  Romania UAV AFT military drone Hirrus 3

The company is offering three UAV models at the moment, each with several configurations and both military and commercial applications. The smallest is the electric-propelled Hirrus. The intermediate-sized one is the fuel-propelled Signus. And the third is the fuel- or jet-propelled Quarrus, an aerial target system that armed forces can use to train troops in missile and artillery ground-to-air fire. AFT is also working on a UAV with vertical take-off and landing (VTOL) capabilities, like Britain’s famous Harrier Jump Jet called the Signus 35V. The company’s main customer so far has been the Romanian armed forces.

“We’ve done thousands of hours worth of flights to help their troops train in ground-to-air combat,” Popp said. “This kind of flight time would have been impossible to accumulate anywhere else.”

The flights not only improve Romanian forces’ sharp-shooting, but also help AFT make its technology even better.

“One thing about the military market is that the standards are exacting,” Negulescu said. “If we can meet those standards, we can certainly meet commercial UAV standards.”

Romania is a good place to test target UAV technology because it minimizes the red tape needed to schedule target flights, Popp said. In a country like Israel, which has some of the world’s best UAV technology, a target test flight can take significantly longer to arrange, he said. In addition to sales to the Romanian military, AFT has sold UAVs to law enforcement agencies in Romania and Serbia.

Still, the Romanian government still buys most of its equipment overseas, ignoring homegrown technology. The notion that a local company cannot match best-in-class technology is so deep-rooted that Romanian media have mistakenly reported that AFT was acquiring foreign technology, instead of the other way around.

Negulescu wants the company to be a trailblazer in creating a robust and innovative defence industry for Romania. “Some people laugh at the idea that a small European country like Romania can have a world-class military and defence technology industry. But it’s a question of approach,” he said. “We have outstanding engineering talent here, some of the best in the world. We need to create an industry that is focused on adding innovative value to existing, cutting-edge US and NATO military products, as well as carving out a leadership position in the engineering of niche military and defence technologies like small tactics UAVs and laser weapon systems.”

Home-grown defence industries not only give NATO members stronger military capability, but create jobs and expands the economy, NATO officials have said. “More organic, less top-down, development of national defence industries is vital for Europe’s future,” Negulescu said. "We need a stronger EU community, especially in light of current threats.”

An irony is that Romania produces some of the best tech experts in the world, many of whom go overseas because they are unable to find good enough opportunities at home, he said. Negulescu would like to see that change, and helping AFT become a world-class UAV player would be a start.

“I’d like to try to help create an ecosystem of Romanian tech companies that can crack the international market,” he said.

bneCompany  Romania UAV AFT military drone Hirrus 1