#038 Why we invested in NRT

Modern Warfare Market Opportunity:

India's defense modernization budgets have seen a substantial increase over the last four years, rising from ~0.9 lakh Cr a year in 2020 to an outlay of over ₹1.7 lakh Cr a year in 2024 on average representing a ~₹12.0 lakh crore ($145 billion) opportunity over the next seven years, to fortify deep tech technologies for defense purposes, aligning with the pursuit of 'Atmanirbharta' (self-sufficiency) within India's defense forces. Comparatively, larger economies like the US have allocated approximately $150 billion for defense modernization in 2024, highlighting the necessity for India to rely more on indigenous technologies to bolster its defense capabilities. This surge in spending aligns with a global shift in the geopolitical scenario, prompting governments, including India's Ministry of Defence (MoD), to accelerate military modernization efforts. The MoD's strategic focus on enhancing indigenous technological development, particularly in AI, has led to an enhanced need for innovations like swarming UAV systems. These systems, comprising drones communicating autonomously using advanced AI protocols, are poised to transform conventional warfare by executing various missions with minimal human intervention. This technology ensures mission continuity even if one drone fails, providing unprecedented strategic advantages.

Why NRT Fits Our Thesis:

A Pioneer in Aerospace Innovation:

NRT, is a deep-tech, cyber-physical uncrewed systems aerospace company developing specialized AI-powered swarm drones. This platform enhances the combat potential of the armed forces, making the company a pioneer in aerospace innovation. These drones utilize distributed intelligence to operate in conjunction with ground forces during offensive and defensive operations. NRT's focus on fine-tuning software for different terrains and implementing self-destruction capabilities in its drones to prevent data breaches showcases its commitment to security and customization. By partnering with global defense players for key components while maintaining control over product design, NRT ensures performance and autonomy in its products.

Full-Stack Platform:

NRT is building a full-stack proprietary platform with a robust pipeline of strategic Next Gen Mission and Tech Platforms:

• Multi-Rotor Unmanned Systems (MUAS): Can be used as a communications bridge, providing a means for frontline troops on the ground to communicate with each other and with command centers

• Air-Launched Flexible Assets (ALFA): Capable of carrying a much larger payload compared to other types of unmanned aerial systems, making them useful for missions like target acquisition and destruction, launching precision strikes with missiles or other munitions, and force protection

• High Altitude Pseudo Satellites (HAPS): Utilized for surveillance, intelligence gathering, and communication purposes, providing a persistent, high-altitude view of an area of interest. These UAVs are significantly cheaper than geostationary satellites, typically used for such intelligence

Each platform is versatile and can be deployed by any of the verticals of the defense (Army/Navy/Airforce). NRT works closely with the armed forces to build a platform based on the Concept of Operations, specifications, and requirements of each unit of the Defense, for upcoming operations. Procurers can modify the platform as per their agile needs, independent of NRT.

Transformed Defense Capabilities:

NRT's high-density swarming system represents a paradigm shift in defense capabilities, empowering the Indian Army with strategic advantages by seamlessly integrating AI-powered swarm drones into military operations. This innovative technology enables the Indian Army to execute missions with unparalleled precision, efficiency, and flexibility. The system's ability to adapt to changing battlefield conditions and continue operations even in the face of drone failures ensures mission success and enhances overall operational effectiveness. Furthermore, NRT's commitment to local manufacturing and technological excellence demonstrates its pivotal role in advancing India's defense capabilities and strengthening its position.

A Visionary Team Driving Innovation:

NRT's leadership team comprises industry veterans with 75+ years of cumulative experience in aerospace, defense, and technology. CEO Sameer Joshi, a decorated retired Indian Air Force Fighter Pilot, brings over two decades of leadership experience. COO Julius Amrit's background in aerospace and start-up leadership, including co-founding Team Indus, reflects his commitment to disruptive innovation. CBO Dilip Chabria's experience in advertising and engineering projects, along with Commodore Jaideep Maolankar's distinguished career as a retired Naval veteran and Chief Test Pilot, add depth and expertise to NRT's leadership.

Competitive Advantage:

Despite the growing interest in swarm drone technology globally, the competitive intensity in this space remains low. NRT's competitive advantage lies in its pioneering work in developing swarming algorithms with communication at the heart of this innovation. The company has also fostered strategic partnerships with global defense leaders like BAE Systems and Honeywell. NRT has been able to demonstrate missions exhibiting decentralized swarming algorithms, positioning itself as a frontrunner in this niche market. Additionally, NRT's focus on local manufacturing, customization, and performance ensures that it stays ahead of the competition in delivering innovative solutions for modern warfare.

Conclusion:

NRT stands at the forefront of technological innovation in the aerospace and defense sectors, which is continuously evolving with a focus on delivering cutting-edge solutions for modern warfare. With a robust pipeline of strategic platforms and a visionary leadership team, NRT is well-positioned to capitalize on India's growing defense modernization efforts and expand its global footprint. We are excited to be part of NRT's journey and confident in its potential to revolutionize the aerospace and defense industries.