Sydney startup Baraja has raised $US32 million ($45 million) in Series A funding for its laser technology that gives self-driving cars the best ‘vision’ possible. And, although the majority of its clients are overseas, this Aussie-grown startup is staying put for the foreseeable future.
Founded in 2016 by Federico Collarte and Cibby Pulikkaseril, Baraja builds technology for integrating LiDAR technology into self-driving cars, combining laser imaging with distance calculation to help autonomous vehicles accurately understand their surroundings.
The startup operated in stealth mode until July 2018, when it released its products globally and started having conversations with investors.
The Series A round is led by Sequoia China and Main Sequence Ventures’ CSIRO Innovation Fund, and also includes repeat investment from Blackbird Ventures.
It’s a significant sum of money for a Series A, but Collarte tells StartupSmart this is partly because the startup is healing in hardware. Because it has built technology from scratch, the startup has a strong R&D component.
“We’re going back to fundamentals,” he says.
“We need to invest not just in hiring people, but also in prototypes, tools and equipment,” he adds.
Hardware businesses are, by definition, more capital intensive than software, and the size of the round is proportionate to what Collarte has planned in terms of execution.
“You cannot be coy and raise a small round. You’re going to run out of money very soon.”
Equally, Baraja focuses on quality at its foundation.
“We’re not just going fast and breaking things,” Collarte says.
“You need to do that, but you also need to build the scaffolding so you can learn from your mistakes,” he adds.
“Fail quickly and fail small, but then win big,” he says.
No place like home
The funding will be used to fuel Baraja’s R&D pipeline, as well as building up the team. The startup has 93 staff members today, but Collarte says that will likely increase to about 200 by the end of 2019.
The money will be used to prepare the startup for the autonomous-vehicle boom Collarte predicts is just around the corner.
Baraja already has offices in China and the US, where Collarte intends to expand business, but he’s also eyeing up the European market.
In fact, the vast majority of Baraja’s clients are overseas — only one is based in Australia, Collarte says.
“There’s not a significant market here,” he says.
However, Baraja was born and raised in Sydney, and Collarte stresses that’s where it’s staying.
There’s a strong regulatory regime around intellectual property in Australia, he says.
“Everything we develop here stays well protected.”
Keeping R&D in Sydney doesn’t affect relationships with overseas customers, Collarte explains, and Sydney’s time zone is fairly well compatible with San Francisco’s and China’s.
However, one of the main competitive advantages of being based in one of Australia’s biggest cities is in talent retention, Collarte says.
If you’re a startup based in Silicon Valley, for example, “you might attract very senior people, but they might leave you after six months or a year,” he says.
Even worse, they won’t leave for any old tech company, “they go to your competitors”, he adds.
People love living and working in Sydney, he adds, and that means “they develop a lot of ideas”.
The time is now
For other startup founders, Collarte’s advice is to make sure there’s a clear market for the technology your creating.
Self-driving cars are happening without Baraja pushing for them, so there’s an obvious and emerging client base awaiting.
“Make sure you have something that is a solution to a big pain point, not just a nice-to-have, and not an improvement on something that is not properly broken,” he says.
However, it’s also wise to consider the timing. If Baraja had launched six months later, it would have been too late to be at the forefront of self-driving vehicle innovation, Collarte says. If it had launched six months earlier, it would have been ready before the market was.
“The one thing that’s tricky is timing,” he says.
“You can have a good idea, and you can have the money, but the timing has to be right as well,” he adds.