Kraken Robotics launched in 2012 with the intention of bringing Synthetic Aperture Sonar (SAS) — a revolutionary underwater imaging technology that provides ultra-high-resolution imagery — to the defence and commercial markets more effectively and efficiently. “Up until then, SAS was extremely costly, making it almost impossible for industry operators to own. With this in mind, Kraken set out to make a commercially viable SAS that offered the highest resolution sonar commercially available at the lowest cost per pixel,” explains Greg Reid, Kraken’s President and CEO, in a recent conversation.
Now the world-leading innovator of SAS, Kraken Robotics is executing its vision of transforming the future of subsea intelligence, enabling their clients to explore, power and protect the planet by integrating SAS into its KATFISH system. Kraken’s SAS technology, which is 10 times the resolution of traditional underwater sonar technology, allows for scanning the seabed, providing the widest coverage and highest resolution possible. “Our technology is very efficient, and the images are very high-resolution — so we can complete work for our clients in a far quicker period of time compared to previous sonar solutions. For defense customers that means underwater mines can be detected quicker, and for commercial customers it means the job is done faster, resulting in less expensive offshore boat time,” Reid adds.
What started as an eight-person team a decade ago has evolved into a 250-person organization with employees based in North America, South America, and Europe, with plans to expand further across the globe.
Meeting global demand from the start
Although headquartered in Newfoundland and Labrador, Canada, the nature of Kraken’s product and service offering has meant a global presence from the outset.
“Kraken has been a global company from the beginning, with international customers and contracts,” says Reid. “Global demand has been driven by an increased focus on maritime defense and subsea infrastructure security and an upgrade cycle in the industry as customers move to SAS from older side scan sonar products. Better put, customers are moving from black and white TV technology to high-definition tech products. In addition, the strong growth in offshore energy and especially offshore wind, is driving demand for our sub-seabed imaging technologies as offshore wind developers need to know what is on and under the seabed before they spend large sums constructing wind turbines and subsea cable routes.”
With highly sophisticated technology and a leadership position in the marine exploration sector, Kraken meets the needs of clients across the Defense, offshore energy and exploration markets.
For instance, they sell to a number of NATO organizations and navies around the world. Most recently, they have delivered KATFISH systems to the Danish Navy and the Polish Navy and recently announced a contract with the Australian Navy to help them protect their shores through sub-sea mine hunting activities. In December 2022, Kraken was awarded a large multi-year contract with the Canadian Navy to supply remote mine disposal systems. They also serve clients in the offshore wind market by surveying acreage under the sea to ensure wind farms can be installed without running into existing unexploded ordinances (UXOs), large boulders or other impenetrable items that may be hidden from view.
Kraken’s work across the globe has meant the development and acquisition of international teams and offices. They have a team in Brazil, for instance, where developers create software that enables underwater inspection and the surveying of the ocean. They also acquired a company in Germany, which enables them to offer pressure-tolerant battery technology for subsea equipment. They have a team in Scotland focused on offshore services, a manufacturing facility in Germany and sales and customer support teams in Denmark, Canada and the U.S.
Accessing financing solutions to enable a progressive expansion
Positioned as a technology- and thought-leader in the industry, and with ambitious plans to grow their offering and expand reach, Kraken has experienced 50%+ year over year growth for several years. As they identify and serve new markets across the globe, RBCx — the tech and innovation arm of RBC that helps tech companies scale – has played a meaningful role in their ability to approach prospective clients and deliver on new contracts. “Kraken has grown again and again with the support of RBC,” says Joe Mackay, Kraken’s CFO.
Financing and risk mitigation solutions have been crucial to Kraken’s ability to expand. Large defence orders, for instance, can range in the tens of millions of dollars and may require significant inventory and human capital. “So, we require the working capital to get the resources and materials and to execute on the order,” says MacKay.
Letters of Credit, provided by RBC, also offer essential financial support and help Kraken monitor the risk involved in taking on projects with immense size and scale. A letter of credit constitutes a promise to pay, upon receipt of goods or services, provided the terms of the letter of credit have been met. It helps protect the business by ensuring Kraken gets paid, even if the buyer refuses to pay, and enhances cash flow.
“Financial support is key to us and allows us to have the ambition to go after large projects and manage the risks as we deliver those projects and invest in our growth,” MacKay further explains. Their contract with the Danish Navy, for example, was made possible with a line of credit and trade finance credit facilities provided by RBCx as well as the Standby Letters of Credit facilitated through RBC and Export Development Canada.
Offering highly sophisticated and specialized hardware and software marine solutions, Kraken Robotics is successfully meeting global demand for their products, which has increased significantly — for 2023, they expect to deliver over 70% in revenue growth compared to the previous year. With the financing and international trade support offered by RBC, they are well-positioned to achieve this growth and continue to expand both their offering and their reach in the years to come.
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