The following interview is a conversation we had with Fabi Riesen, CEO and Founder of Loft Dynamics, on our podcast Category Visionaries. You can view the full episode here: Over $29 Million Raised to Build the Future of Flight Training
Brett
Hey, everyone, and welcome back to Category Visionaries. Today we’re speaking with Fabi Riesen, CEO of Loft Dynamics, a flight training platform that’s raised over 29 million in funding. Fabi, how are you doing?
Fabi Riesen
Great. Thanks for having me on your show.
Brett
Not a problem. Super excited. Let’s jump right in. Tell us about what you’re building today.
Fabi Riesen
Fantastic. Yeah, we just came back from a great company off site, and everyone energized, getting new things done, having the chance to sync with the whole team. Pretty great.
Brett
Amazing. And tell us now, let’s talk about the company. Tell us about everything that’s going on there. At a high level, what does the platform do?
Fabi Riesen
Yeah, so basically, Loft Dynamics is developing, designing, creating, manufacturing, and operating flight simulators in the professional market. And the specialty is Loft Dynamics is the company which introduced in the professional flight simulation the visual system using virtual reality headset. So head mounted headset, which is basically finally providing the pilots correct visual system. I can explain it a little bit more in detail to understand what I mean by this, but by today, we are still on the whole health. The only company which is having qualified simulators using that head mounted technology, display technology in flight simulators.
Brett
Take us back to the founding of the company 2016. What was going on in your world that you decided, this is the business I want to go build?
Fabi Riesen
Yeah, well, everything. I started with a passion, which is going longer back. I mean, as you know, aviation, either you have the passion or not already as a kid, so myself, I was always fascinated in that, having glasses, I didn’t end up as a professional pilot. So I ended up as an engineer. Worked for around 20 years in a large company as an engineer, and I did my ppL back in 1999. The ppL, private pilot license on a fixed wing engineering, aviation passion, somehow, in my mind, for all the time. And back in 2013, I got my first virtual reality headset. It was a very SDK development kit, version one of virtual reality headset, quality wise, far away from what you have today.
Fabi Riesen
But the moment I had it in hand, it was for me, like, okay, that’s going to change the world in aviation training now. Why? If you are having a head mounted display, it allows you that if you move the hat, the whole environment is moving in a three dimensional, depth perception way. Like if you watch a tv and you move your head a little bit left to right, it’s still the same picture. But if you do it in reality, you see that everything which is not aligned on the same distance is moving against each other. And that’s basically that perception. Having flight simulators, which are 20 million or more, they still have a static protection. So if a pilot is moving a little bit ahead, left and right, nothing changes. So that said, it is simply wrong.
Fabi Riesen
And because it’s simply wrong, pilots have to adapt their fly skills to learn to fly the simulator. And if you had mounted headset, that’s not the case. You can even watch 360 degrees, you can do vertical reference flying and so on. I mean, you can do all those crazy stuff, having a virtual ready headset. So this is eleven years back. So ten years back, I got the first prototype, working in the living room with a motion platform, VR glasses and so on. And then in 2015, I did met the CTO today. CTO from the company. Via university. Via university project. And we just decided there that we want to build the world’s best simulator. Then in 2016, we founded the company and just started to develop.
Fabi Riesen
And when people saw the team was growing and it was an all free time project in 2018, this is basically the tipping point. So, approximately six years back from now, we’ve been contacted by the European Aviation Authority, based on seeing a YouTube video, what we did, and that’s where they reached out, and we realized that a part of having a passion. We out of a sudden build something. Where is the real problem for which is very seldom having engineers doing something.
Brett
Yeah, I can see that. Now, who are the typical customers? Who are you selling this today?
Fabi Riesen
Yeah, by today, it’s a pretty road types. So given that the fly simulators, the traditional wise, the traditional full fly simulators are super expensive, the customers were basically the end customers, pilots, they simply don’t have access. The operators or airlines or whatever don’t have their own ones. So they were always, they always build simulator centers. So three years ago, there were two simulator centers in holo, Europe where it was possible to get a check right on the h 125 simulators simulator. So the customers there were completely different. So all the pilots had to travel somewhere to make their half year jack. Now, with making this more realistic and also more affordable, being more than 20 times chief, we out of a sudden have a complete new customer base. What does it mean?
Fabi Riesen
All of a sudden, you have a small helicopter operator which is able to afford their training device instead of sending their pilots far away to a place to get trained. So our customer base are operators, small operators, fly schools and so on, which are just embedding the safe and better training into their syllabus, into their initial training, but also into their half yearly checks, check rides, type ratings and so on. So from that point of view, those are typically customers. Are those buying the devices, operators, fly schools and the end customers, what you call the users autopilot.
Brett
How long did it take from when you first started to develop until you were generating revenue? What was that time period?
Fabi Riesen
Yeah. So keep in mind, until 2018, where the European Authority, to us, our goal was not to create business, from that, our goal was to create the world’s best simulator. So from that point of view, in 2018, we decided to create the whole company into direction that we really generate business. And in 2019, we got our first launch customers in 2022. We’ve been break even.
Brett
Amazing. What have you learned about go to market and bringing technology to market throughout the journey so far?
Fabi Riesen
Yeah, so one of the biggest learning was, like I’ve mentioned before, we somehow enter in a market which already exists. So, I mean, simulators in aviation, fly simulator, training device is nothing new. It’s a huge business, but we completely disrupt it based on the fact that out of a sudden were able to make it affordable. So it’s a very similar situation like we had years ago at the universities. There were those big mainframe calculators where you had to bring this self made software, and they were running it through the mainframe, big computers and so on. And then you got the results and then you went home. By two days, everyone is having their computer as a laptop or in its mobile phone and so on. And making with that, it has to be made affordable as well accessible.
Fabi Riesen
So the biggest learning there was that, as we had in mind, fly simulators, it was always fly simulator trainings, being the customers from a TDM training device manufacturer. But out of a sudden, were able to provide such a device doing the same thing to a fly school or to an operator, which is not an environment where you have hostelry, several engineers and so on. It is something completely different. Somewhere in a hangar, build a small loft, added the simulator there, and from that point of view, we had to build the product. First of all, it was much more simple to use. So a flying structure can make half a year, sorry, half a day, I will repeat that. So a fly instructor can make half a day training, and then Flightstarter will be able to use the device.
Fabi Riesen
The simulator with his student or with his pilots will recheck without a lot of engineering work needed around. So we had to adapt the product to make it much more user friendly than traditional flight simulators are. In addition, he also had to create a huge organization which takes care of the customer. That machine is always qualified, gets re qualified, is maintained and so on. So really taking care of that, the customer is able to use it just as a tool embedded in their regular workflow. And then the second thing we also had to learn, given that we completely disrupted the business model, that it takes a while until those changes are happening. And there is a lot of, let’s say, dynamic in politics involved because not everyone likes it, because it’s disrupting business.
Fabi Riesen
But that’s actually also the very nice thing in the approach we are doing. Last but not least, we also had to learn that building a simulator is 2% of the whole thing, although 98% is making sure that we can qualify the simulator in a regulatory framework from aviation. So that’s basically the main task. Out the feet.
Brett
And what about marketing from a marketing perspective, what’s the strategy look like today?
Fabi Riesen
Yeah, so we have a fantastic team doing great work there to make sure that we are known as a company in the industry, but also known as a company for further employees. So that’s working really well. In the meanwhile, in aviation, it’s known, I mean, especially that the company itself is still the only one which is having that specific qualification achieved with that new technology. So at the end, we started in aviation, we started in the helicopter, in the rotor crafts, in helicopter Como, which is more a niche in the whole aircraft, which is also the area where the visual system is very important flying close to the ground. So from that point of view, it is the most demanding area. Fixed wing are going to be easier as well. Evtos it’s much more logical to use that type of technology.
Fabi Riesen
But in helicopter, people try never to go on the simulator. They hate simulator because the simulator is simply not representative like the real aircraft. So from that point of view, the strategy is get the pilot on the device and then it’s a done deal. This is quite, it sounds quite funny, but the moment most skeptical pilots are sitting on the device, they get hands on, they immediately gone. And this is not a big work afterwards to convince, because everyone who is a real pilot immediately understands the big advantage. Because, you know, in real helicopter you can’t do a lot of things you should do. You can’t do emergency training and so on. Malfunction training, you can only talk about it on the simulator. You can do real malfunction training, which is basically the best thing what can happen for a pilot.
Brett
What about fundraising? What have you learned about fundraising so far? As I mentioned there in the intro, you’ve raised over 29 million to date. What’s that journey been like and what have you learned?
Fabi Riesen
Yeah, so we started a while back with full friends and families, and in 2022 we got that fantastic contact where were able to raise 20 million. As you could read, with skydating and a huge network behind. Basically, the important thing is if you do a product or a service where a lot of passion is involved, it’s important that whoever is becoming an investor also needs to share that passion, because that gives you a good understanding, first of all, of seeing in which direction it should go, but also to understand the business. It sometimes sounds quite abstract, what’s all happening in the aviation business. So if you just start looking on the numbers without understanding that first, the qualification is needed, that needs time, we need to do such things and so on. It’s quite important to have that.
Fabi Riesen
And with that, were super lucky until today to have a fantastic investors, and were super lucky to have this nicely aligned with the development path from the company. So we never had to go explicitly and start pitching the idea and so on. It was just perfect timing. Well, we got in contact with those people.
Brett
Have you seen the conversations with investors evolve since you started in 2016? Are you seeing a lot more appetite for hard tech like you’re building.
Fabi Riesen
You mean appetite from investors? Yes.
Brett
To invest in things like this, because I feel like it’s a, a bit untraditional for a lot of the venture capital that I see being invested into startups. Normally it’s going into cybersecurity tools, or retail technology, or e commerce tools. But have you had conversations change since you started the company?
Fabi Riesen
Yeah. I mean, every day we get more requests to be part of the loft capital. The reason is quite simple. The moment it’s understood how that several billion business is getting disrupted, the appetite is increasing. And I think that’s also the interesting part on the way we approach the whole thing. So from that point of view, it’s. It’s disrupting it from. It is disrupting it from a distribution point of view. I mean, instead of having two simulators in whole Europe, we already have 15. Nine will follow very soon. This is one thing which is changing. And the other part which is also changing is that the level of the devices are much more realistic. And from that point of view, it allows much more possibility to move things into software than hardware. I give you an example on that.
Fabi Riesen
If you have tradition of a full fly simulator, and you want to have on the helicopter a mirror to make vertical reference training, they had to add somehow a screen there, which is somehow not realistic, but to represent the mirror to watch vertical down, I mean, those are all things you don’t need touch. Those are all things you can make very easily in software. And then you can change it. You can have fly it with, you can fly without, you can have a different door with a different view and so on. Everything you don’t need touch is just software. And this software can upgrade the boxes, they are connected and so on. So it simplifies a lot.
Fabi Riesen
And out of a sudden it’s like a Tesla, which can convert your device and upgrade it, adding additional modules without having an intervention in avionics or whatever. So from that point of view, it is a, a slowly but sure move from traditional hardware thing in a specific business area into software. This is always interesting for investors.
Brett
Final question for you. Let’s zoom out three to five years into the future. What’s the big picture of vision here?
Fabi Riesen
Well, from that point of view, the training devices in aviation, they definitely change. It’s not going to be any more a three story high building. It’s not going to be anymore a training center, which is so expensive that you need to run it 22 hours per day. It’s not going anymore. The fact that pilots first need to travel one day to get afterwards into a simulator with the wrong visual system at 02:00 in the morning. It’s not anymore the way that helicopter pilots prefer to use the real helicopter, even if it’s much more dangerous because it’s unrealistic. There will be a big transition in that area and the fly training is just going to be much more accessible and much more available.
Fabi Riesen
And there will be much more things will be done on the simulator, on the FSD, rather than in the real aircraft, which has an indirect impact. That there will be a huge amount of accidents which won’t happen anymore. Because by today, one third of the accidents is happening during tacking and training in helicopter. And with the availability inaccessibility, the pilot shortage is going to be not anymore so high. And the big change in that is that the training is not any more centric and it’s much more embedded in the regular workflow from the pilot. So they have the helicopter close to the simulator or they have the aircraft close to the simulator. They can maybe come back from a long flight leg and quickly jump in the simulator to complete the check rather than going home.
Fabi Riesen
And the day after flying to another place to make the check and stay again three days away from the operation of the family.
Brett
Amazing. I love the vision. All right, we are up on time. Before we wrap, if there’s any founders listening in, they feel inspired. They want to follow along with your journey. Where should they go?
Fabi Riesen
Well, it’s always a good start to follow us on social media, like on LinkedIn, on Facebook, wherever we are on the webpage, we also post our regular thing. You can subscribe to get the news, and definitely don’t hesitate to reach out if you want to know more because it’s, I think, one of the most exciting stories happening in aviation. And from that point of view, happy to share it with everyone who is interested.
Brett
Amazing. I love it. Bobby, thank you so much for taking the time, especially given that it’s late in the evening on a Friday there in Switzerland. I really appreciate it.
Fabi Riesen
Thanks a lot for having me in your show and looking forward.
Brett
All right.
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