There are a lot of remarkable things about Nathan Nwachukwu and Maxwell Maduka. The first is that at just 21 years old, they have built startups — one of which was acquired by Nord Motors, and another that is backed by $1 million in VC funding.
It is also remarkable that at 15, Nwachukwu started his journey as an entrepreneur, and losing an eye at that age wasn't enough to stop him.
"I learnt a lot of skills," he said. And in just three years of learning these skills, he built Klas, an Edtech platform currently used by 700,000 people.
Maduka's story is just as inspiring. At a young age, he was the lead drone engineer in the Nigerian Navy; he also built a drone company called Spatial Nova that specialised in building micro drones. Nord Motors acquired it in 2022.
Today, Maduka and Nwachukwu are building Terrahaptix, a drone company with an unexpected twist. These founders may have discovered the key to hardware success in Africa.
Building Terrahaptix
Hardware technology in Nigeria and most parts of Africa is scarce. This is because hardware is hard, and few entrepreneurs are courageous enough to venture into building a hardware company.
However, there are pockets of people like Lezley John Jumbo and Monsuru Anifose who are bold enough to build hardware products.
Nwachukwu and Maduka fall into this category, and according to Nwachukwu, as scarce as hardware technology might be, there is a community in Nigeria whose passion is building drones. That community is a big part of Terrahaptix.
Nwachukwu joked that they probably hired the entire ecosystem. While Terrahaptix might just be a nine-month-old company, the team behind it has known each other for years, so building was relatively easy.
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Building was also easy for Maduka and Nwachukwu as they are not first-time founders, so getting investors was not difficult.
Deciding to build Terrahaptix was borne out of a passion for Africa.
"I think I'm a Pan-Africanist," Nwachukwu says. "I want to see Africa work in my lifetime."
He wants to build something that matters, something that will be a sign of hope for the continent.
An Africa that works needs to be an Africa that is industrialised, and hardware is key to getting there. These were the words of Monsuru Anifowose, CEO of Kifta Technologies, during a discussion we had last year. According to him, nations are respected more for a combination of hardware and software prowess than software alone.
The importance of hardware-led industrialisation is also one of the reasons the Nigerian government decided to usher in European car manufacturers to begin assembling cars in Nigeria in the 1970s.
This plan failed by the 1980s, but maybe Terrahaptix can single-handedly revive industrialisation. However, hardware in Africa has its own unique challenges.
A genius business model
Terrahaptix has an ambitious dream: making Africa one of the top producers of drones in the world in the next five years. But it doesn't plan on producing drones and waiting for people to buy them; instead, it employs a B2B business model.
Terrahaptix gets contracts from big corporations to produce drone fleets. These contracts cover the entire production cost. Their clients usually include large oil companies that need drones for asset inspection.
Interestingly, oil companies are saving billions of dollars using drones for their inspections. Per EPCM Holdings, the use of drones in the energy industry could save up to $90 billion annually.
Even companies in agriculture, mining, and construction need drones, and Terrahaptix counts them as frequent clients.
"Companies in these industries have been buying drones for decades," Nwachukwu says.
He and Maduka didn’t come up with this business model themselves; they adapted it from Anduril, a $14 billion defence tech company in Silicon Valley that recently raised $1.5 billion in August this year.
A former Anduril Executive, Eliot Pence, is on the board of Terrahaptix as an investor and advisor.
To complete the Anduril model, Terrahaptix uses the money it could have used for drone production to fund research and development (R&D).
"We use our money for R&D and do early research that leads to the creation of demonstrators; we then use these demonstrators to get contracts that are called just-in-time-manufacturing.
"So once the contract comes, you cover the production, and you produce exactly what is stated there, nothing more, nothing less."
Come for the hardware, stay for the software
The copied Anduril model is not what makes Terrahaptix’s business model genius; it’s how it keeps clients paying even after the contract to create drones has ended.
Nwachukwu explains that the original idea for Terrahaptix was to be a software company, and before the company was launched, they had built a software product called Artemis.
Artemis is an AI-powered command and control software built by Terrahaptix. It acts as an AI pilot for drones, making them autonomous — a feature clients pay for annually, providing Terrahaptix with a steady stream of revenue.
The company, which is almost a year old, has already made $1.6 million in total revenue. Nwachukwu reveals they will probably cross $3 million before the year ends, doubling what they did in ten months in just two.
Terrahaptix has been landing deals. In August this year, it won a $500,000 contract to supply 70 Archer drones to Ghana. The contract came from GEMsolutions, a drone services provider that had been using a European UAS before deciding to switch to Terrahaptix.
The reason for this switch lies in the Nigerian company’s competitive advantage, which includes lower-priced drones and impeccable after-sales service.
When you’re playing in a space where most of your competitors are foreign players with deep pockets, having a strong competitive advantage is important. For example, GEMsolutions, which had been buying drones from a European company, paid almost triple for those compared to Terrahaptix drones.
Nwachukwu confirms that Terrahaptix drones are priced 55% lower than competitors — a great deal even for oil companies with deep pockets.
This price point is possible because Terrahaptix sources materials locally—80% of the drone materials are sourced locally. However, sensors and cameras are mostly obtained from China. Cracking how to make their own sensors and cameras could be a major game-changer for Terrahaptix.
In the meantime, the company stays competitive with great after-sales service, such as training and maintenance.
"The unique proposition is the end-to-end experience you get with Terrahaptix. You can't get that with foreign players."
Geopolitics: The unexpected challenge
Terrahaptix seems to have it all: a co-founder who has built a funded startup and doesn’t have issues raising funds, a technical co-founder so skilled at building drones that his first drone company was acquired, and a community of passionate drone builders who enjoy what they do. However, its challenges come from the most unlikely place — geopolitics.
Navigating geopolitical issues is a skill Nwachukwu didn’t think he'd have to learn on the job at Terrahaptix. This challenge is based on the "death machine" view governments have of drones, no thanks to the Russia-Ukraine war.
Terrahaptix has to navigate a lot of geopolitical hurdles before it can sell its drones in any country. On one hand, it tries not to upset the US government because it could impose sanctions, and on the other hand, it needs to maintain good relations with China, where its cameras and sensors come from.
"We have to play this balancing act — way more political than I could have ever imagined. There are some countries we can never export to."
This political challenge is also why Terrahaptix stopped building for the Nigerian military. Nwachukwu says "The US does not allow US investors to invest in companies building for foreign militaries," so they missed out on some investments in the early days.
However, they are figuring it out as they go and are making strategic moves, such as locating their 15,000 sq-ft factory in Abuja — a decision that has political and security leanings.
The factory needs heavy security, as it’s crucial that their technology doesn’t fall into the wrong hands.
Terrahaptix's product line
The company makes various drones and robotics products:
- Archer Drone: The company’s first and flagship product. It is a long-range surveillance and mapping drone capable of traveling 200 kilometres and staying airborne for up to five hours.
- Horizon: A new drone system, this crop-spraying drone can hold 30 litres of crops.
- Duma: A ground drone used for autonomous ground surveillance, patrol, and cargo support. It has a pull load capacity of 2.5 tonnes and a payload capacity of 400 kg. It can also be used as a planter and harvester on farmlands.
- Kallon Sentry Tower: A 23 to 40-foot autonomous surveillance tower that uses AI to track, identify, and detect threats up to five kilometres away. It sounds an air-raid siren when there’s an imminent threat.
Besides the geopolitical challenges, Terrahaptix faces a few obstacles. Nwachukwu says the technical team is so strong, they can build anything. Funding is also not a problem.
This is why, in the next five years, Terrahaptix aims to dominate 25% of the $4 billion African drone market. The company raised $640,000 in pre-seed funding in its early days but has no plans to raise more as it has sufficient cash flow.
Coupled with a passion to see Africa work, Terrahaptix might just be the hardware startup that sets Africa on a path of true industrialisation.
