McRock Skyspecs What does Tom Brady have in common

What do Tom Brady and renewable wind energy have in common?

In this case, just a name and SUPER cool, never-before-seen career accomplishments

This is the story of SkySpecs, the world’s largest provider of autonomous drone inspection services. And where McRock chose to lead $10 Million follow-on financing

The SkySpecs journey began in 2009 when a group of engineering students at the University of Michigan, including one Tom Brady, volunteered on a robotics research project. At graduation in 2012, Brady and some of his classmates co-founded SkySpecs.

Their first obsession – build an anticollision system for drones so they could fly autonomously. With just the push of a button, an industrial-grade drone with a navigation system and a camera would take off quickly and safely perform an inspection of a difficult-to-access machine, building or other infrastructure asset.

This killer app is no seven Super Bowl titles, but it did change the world, in the rapidly growing wind energy sector.

  • Wind turbines are tall – as tall as a 32-story building (over 300 feet)
  • Located in remote locations and sometimes at sea making human inspection even more dangerous

Until SkySpecs, traditional inspections were done by specialists climbing up and down ropes all day. Today, the SkySpecs fleet of drones quickly, safely and cost effectively captures digital details on damages to the turbine blades. Fixing damages before catastrophic failures of the turbine blades keeps the power flowing. Yes, blades sometimes just snap and drop to the ground.

SkySpecs , now the largest provider of this specialized service, has inspected approximately 30,000 wind turbines in countries around the world.

Close to 90% of new electricity generation capacity in 2020 came from renewable sources with just 10% now powered by gas and coal. This trend puts green electricity on track to become the largest power source by 2025, dethroning coal, which dominated for the past 50 years.

As the world looks to tackle the climate crisis, renewable wind energy is growing increasingly attractive to investors. The number of wind assets changing hands between financial investors, the due diligence of existing wind turbine portfolios and investment decisions into new projects are all predicated on analysis of the overall ‘health’ of a wind farm.  SkySpecs plays a critical role in this environment.

To further SkySpecs growth as the leading digital asset management platform for wind energy, McRock Capital led a US$10 million follow-on financing in February 2021 with participation from Statkraft Ventures, Equinor Energy Ventures, Evergy Ventures, UL Labs, Capital Midwest and Huron River Ventures.

I don’t know about you, but we get way more excited about this Tom Brady’s touchdown for renewable energy and the impact it has on planet earth. Seven Super Bowls is pretty cool too.

mcrock tom siebel

How a billionaire made industrial AI software hot

The year 2020 was a historic year. While the ongoing global pandemic stayed in the headlines through most of the year, many other social, political, and economic events made a major mark in the history books. As these major events upended markets and economies world over, tech companies and their largest shareholders raised billions of dollars in the public and private markets. This was an unusual turn of events and was unlike anything that we have witnessed in other economic slowdowns of the past. So, what is the difference this time around?

While there are many factors that fueled the Initial Public Offering (IPO) frenzy, we believe this was the first-time investors looked beyond the uncertainty caused by the pandemic and towards solutions. Extended lockdowns and a shortage of human workforce made a compelling case for automation and digitization across all industrial market verticals, including those that have been historically reticent to adopt.  What we discovered over the past year was that any underlying technology that accelerates digitization commands a massive premium.

During the second half of 2020, we saw many high-profile companies like Airbnb, Palantir, Doordash and Snowflake go public. As this IPO frenzy continued, one industrial AI company which we have been tracking prepared to go public. This, of course, is, led by the billionaire tech entrepreneur Tom Siebel.

There is enough pre- and post-IPO analysis on C3 available so we will stay away from repeating any of that good intelligence. Rather, lets focus on the lessons that could be valuable to other Industrial AI start ups.

Lesson 1: Scale = Partnerships + Reference Customers

By the end of FY20 (ending April 30, 2020), generated $156.7 M in revenue alongside of a 71% YoY growth rate. A major revenue driver for C3 was, and continues to be, its strategic partnerships. For instance, its partnership with Baker Hughes, the large oil and gas services company, is both a customer, investor and a partner to It represents $51 M of C3’s total $157M revenue ($39.5M as a customer and $11.5M as a reseller) and as we learnt in their recent Q3-21 earnings call this partnership is set to bring $450M in revenues over the next five years. C3 has entered other strategic partnerships in defense (Raytheon), and tech (IBM, AWS, Google, and Microsoft), which has helped them scale.

When it comes to reference customers, C3 has been focused on large fortune 500 customers in each of its verticals like Shell, 3M, U.S. Airforce, AstraZeneca, and others.

Now, we all can acknowledge that attracting strong partners and large customers is hard. But how did C3 manage to do it? They realised early on that skills have “gravity” and so they invested in training and education.  Once they trained a partner, a system integrator, or a customer on how to use their solutions, the solution got sticky making it hard for them to switch. So, help your customers unlock that black box of analytics and empower them to understand it.

Lesson 2: Land + small Level-Of-Effort = Expand

Land and expand strategies are very common with industrial customers although executing on them is hard.  In case of C3, the average ACV jumped from $1.2M in 2016 to $12.1M in 2020. With an average 3-year contract, they made ~$4M per contract per year, which is impressive.

For an AI company, the difference between land & expand versus land & flat comes from the level of effort the customer must spend rolling out the solution. If a customer must lend its domain expertise for months or years to train your models, then the time-to-value for them is too long to stay invested. In the case of fortune 500 customers, those large organizations will often have challenges integrating siloed data streams that are required to hydrate your models. C3 has done a fairly good job in attracting talent which has helped them build internal domain expertise and reduce dependency on its customers. They also do a decent job in setting customer expectations on time to deployment.

In a nutshell, the simpler and more transparent you make it for your customers to realize value, the easier it gets to expand those customer accounts.

Lesson 3: Platform + Applications rather than Platform vs Applications

Founders that are building an AIoT platforms for enterprises invariably face the question of whether they should offer apps to customers.  To be clear, these applications serve as a marketplace of pre-trained AI models that can be applied to a particular problem across different customer accounts in a vertical. All major cloud service providers have such marketplaces, but the jury is still out on whether they have been successful. Today, C3 offers its customers the C3 AI Suite (a platform) and C3 AI applications (the pre-trained models).

Industrial customers look for feature proximity when they engage a technology vendor. Prospecting, selecting, and onboarding each vendor is an expensive and time-consuming exercise for them. So, if they are deploying an enterprise AI platform, they need to be smart and selective as to the number of application vendors it works with. While it is unclear what percentage of C3’s recurring revenue comes from its platform vs applications, it certainly allows its customers to quickly deploy pre-trained models to standard challenges across industries. This approach works well for specialized application vendors too, as they can focus on solving specific use cases without being dragged into solving relatively easier problems.

Bottomline is that if you are a platform vendor, think about the standard challenges your customer faces and solve those head-on with applications.

Lesson 4: Software + Services = AI

The jury is still out on whether we can have industrial AI companies with no professional services. While it does not appear obvious, it is important to limit your professional services revenue. This is because the positive impact comes at a cost (literally). When you continue to expand your professional services revenue, your gross margins can take an unnecessary hit, which is not a great place to be when talking to investors and acquirers. For C3, revenue from professional services includes the fees associated with the implementation of C3 AI Applications. In FY20, professional services represented just 14% of their total $157M revenue. C3 controls its services revenue in two ways. First, it partners with system integrators like IBM who can deploy their solution and secondly, it trains customers to build and deploy AI models in production by themselves.

While the exact same approach may not work for other AI companies as enterprise adoption in antiquated verticals still has a long way to go, but with focus on your core product you are likely to grow profitably.

So, are you building the next big thing in the Industrial AI world?

For years, the Industrial AI software industry has been looking for a posterchild, a company that could be held up as an example of a high-growth business with a large scale that solved urgent customer pain points and made money for its investors along that way. C3 was well positioned to grab that spot and in a flash has turned a once unremarkable sector to the public market investors into a space worth their attention and money. For now, C3 is that posterchild, but this is just the beginning as there are so many industrial customers and use cases that can benefit from innovative solutions driven by technology & AI.

McRock portfolio company acquired by E2IP Technologies

We are excited to announce that e2ip Technologies (e2ip), a Montreal-based Human-Machine Interface (HMI) and Smart Surface solutions innovation leader, has acquired Arizona-based Serious Integrated Inc. (Serious), a leading provider of industrial, medical, and commercial touch screen HMI-IIoT solutions. As part of the acquisition, McRock has taken a minority ownership position in e2ip.

e2ip and Serious were introduced by McRock and have been working together for over a year as strategic partners to create and deliver innovative solutions to global market leaders. This acquisition will enable e2ip to invest in and support the scalable growth of Serious Integrated technologies and solutions.

“e2ip has a broad portfolio of Smart Surface and HMI technologies and solutions”, said Eric Saint-Jacques, CEO of e2ip. “Our medical, industrial, aerospace and transportation industry customers are global leaders in their markets and are constantly seeking optimal HMI solutions and breakthrough innovations. The addition of the Serious team, technology portfolio and solutions in the embedded systems, LCD, touch screen applications and hardware integration fields will create greater value for our customers by expanding the breadth of our capabilities.”

Increasing global competition and demand for leading-edge products create a greater need for companies to find innovative differentiation in their products. Touch screens are a key HMI technology bridging the gap between functionality and user experience. Widely integrated into consumer electronics, they are now being broadly adopted to improve visualization, increase worker productivity and make operations more efficient by providing a simpler and more efficient interactive experience with business devices and equipment.

“We’re thrilled to become part of e2ip”, said Terry West, Founder and CEO of Serious. “e2ip’s cost effective, global and high-quality manufacturing footprint combined with their top-tier multinational customer relationships bring the Serious portfolio onto the world stage with immense possibilities for integrated Smart Surfaces. Serious was founded with the goal of delivering innovative HMI and IIoT experiences and the combined forces of e2ip and Serious promise to deliver truly breakthrough value for customers.”


mcrock jan 13 2021 mcrock capital promotes udit

McRock Capital Promotes Udit Bhatnagar to Vice President

Toronto, Ontario–(January 13, 2021) – McRock Capital, a leading venture capital fund manager investing  exclusively in the Industrial Internet of Things (IoT), announced today it has promoted Udit Bhatnagar to  the position of Vice President.  

Udit joined McRock in late 2018 as an Associate on the investment team. Udit will increase his  responsibility around the deployment of McRock’s most recent $112 million venture fund while  continuing to provide portfolio growth and exit strategy assistance to McRock’s inaugural $70 million  fund. Along with this promotion, Udit has been appointed as an Observer on the board of Barcelona-based  Worldsensing. 

“At McRock, we believe in an inclusive workplace and promoting from within,” said Whitney Rockley, Co founder & Managing Partner at McRock Capital. “Udit’s international background, work ethic and passion  for venture capital embodies McRock’s value of bringing diverse perspectives to our firm.” 

Udit moved to Canada in 2018 from India where he was leading the due diligence team at Keiretsu Forum.  Before he discovered his passion for venture capital, he spent many years in the technology sector working on key products and services from companies like Infosys and Danske bank in Spain, Denmark, and Japan.  His international career has helped him in developing a global perspective and deep understanding of  technology driven impact in diverse sectors. 

Udit’s enthusiasm for investing in the Industrial technology space is driven by his engineering background  and desire to create big impact on large industries. Udit holds an MBA degree from IE Business School in  Spain and an undergraduate degree in industrial engineering from VTU in India. Udit speaks English, Hindi  and Spanish.  

About McRock Capital – McRock is the first dedicated Industrial Internet of Things (IIoT) venture capital  fund manager focused on the intersection of sensors and software in large industrial markets and smart  cities. The McRock team has a unique background of building high-growth venture-backed IIoT companies  while also having worked in the power, water, oil and gas industries. McRock is backed by several leading  institutional investors and global corporations including Cisco Systems, Caterpillar, Shell, Mitsubishi,  AspenTech and Électricité de France (EDF). For more information, visit and follow on  Twitter @McRockCapital.

mcrock dec 30 2020 dare i use the b word

Dare I use the “B” Word

It is the end of December and the weather is grey. I look out the window from my makeshift home office with a green screen behind me and a big bright light in front of me while I type on my laptop which sits on my homemade games table of cribbage, backgammon, and checkers. Who would have thought that this is how many of us would be ending 2020…nine months of lockdown and still counting?

We all knew there had to be a global market correction because the world has been on a tear. Our investors had been cautioning us since 2017 but no one would have guessed it would be a pandemic that would reshape how we live, work and play. Did I actually write “play”?

At the beginning of the pandemic, I thought the irrational hype of tech would subside like it did in the two previous recessions I had lived through as an adult. I could not have been more wrong. The irrational hype of tech has only accelerated.

Competition for deals was higher than I have ever witnessed in my career. Entrepreneurs, especially in California, had more swagger and ego than before, which I thought was incomprehensible.  

Valuations soared. It has been the year of irrational exuberance on steroids for the tech sector.

But the question I keep asking myself is whether it is a “B”ubble or a new era of how we use tech to live, work and stay connected? There…I cut out the word “play”.   

I believe the world will continue on its torrent path of using tech. I also believe the longer this pandemic lasts, the more entrenched and reliant we will be on tech to remotely monitor, manage, and control our operations. It is not to say that we will never be there in-person, but this pandemic is providing us with software alternatives that help us operate better and keep production up, even from afar. 

I believe the acquisition of tech companies will soar in 2021 and it will be known as the year of acquisitions. This will not just be the acquisition of tech companies but the acquisition of many large super incumbents in traditional businesses. The reshaping and reemergence of companies and industries will be fascinating. 

Many are predicting that the 2020’s will be the liveliest decade of our lives. This prediction comes from examining the decade after the Spanish Flu subsided. The roaring 1920’s was a decade to live large and unabated. This was arguably the decade where real risk taking emerged in the Industrial Era.

I do not believe we will be living lively in 2021 or even 2022 but I do believe what we do in the next few years is setting the stage to live lively for the remainder of the decade. The race is on and what we are witnessing is an acceleration and reshaping of economies and markets. In other words, this is not a bubble. We are entering an accelerated Digital Era that is impacting every industry on earth.

Author: Whitney Rockley, Co-Founder & Managing Partner of McRock Capital