Air Force signs balloon startup WindBorne to $49m data deal
The ceiling is nearly $50m. The Air Force has so far ordered $1.7m of it. That gap is the whole lesson in how defence money actually reaches small hardware firms.
The US Air Force has agreed to buy atmospheric data from WindBorne Systems under a contract worth up to $49m, the company's co-founder and chief technology officer Andrey Sushko told TechCrunch.
The Air Force pays only as it takes data. It can order readings for particular regions at particular times.
So far it has ordered $1.7m worth. Company executives expect further orders, on their account.
That is the shape of most defence awards to small suppliers. The headline figure is a ceiling, not a cheque, and the revenue arrives in instalments the buyer controls.
WindBorne was founded in 2015 and is based in Redwood City, California. It flies about 700 autonomous weather balloons, selling the sensor readings and feeding them into its own forecasting model.
The company has worked with the National Weather Service and the Air Force and Navy before. This is the largest contract it has been party to.
The award was made without competitive bidding. Sushko said the government had determined WindBorne was the only company able to supply the capability in the way its operations required.
Sole-source awards are the exception that small hardware companies spend years engineering towards. They are granted on the argument that nobody else can do the job, which is a claim built from prior contracts rather than a pitch deck.
WindBorne's record with the same agencies is what made that argument available to it. The sequence matters more than the size: small contracts first, the large one afterwards.
Chief executive John Dean told TechCrunch in August that the company had raised a $37m Series B. The Air Force money is described by Sushko as support for growing the balloon fleet and for research into the hardware.
Earlier in the summer the company released WeatherMesh 6, which it says forecasts more accurately than the physics-based model run by the European Centre for Medium-Range Weather Forecasts. In August it flew an unpowered system into the eye of a typhoon, steering balloons by changing altitude — bleeding air or dropping sand ballast — to catch winds heading the right way.
For a founder selling hardware, the practical reading is unglamorous. Defence procurement can be real revenue, but it is drawn down order by order, it rewards a long record with the same buyer, and a $49m announcement may be $1.7m of cash.