Scaling Up And Staying Focused: Stephan Beyer, Dryad Networks

headshot of CFO Stephan Beyer
Courtesy of Dryad Networks
"We can easily be distracted by investors, customers and others who are coming up with great ideas," says Dryad's CFO Beyer. "They're probably great ideas, but they're not for us at this stage."

“We’re tackling a huge problem here that is real, that’s becoming bigger every year,” says Stephan Beyer, CFO of Dryad Networks, when speaking of wildfires and the attraction of working for a tech company focused on their early detection. Dryad’s technology can “smell” a fire as early as the smoldering phase using solar-powered sensors sensitive to certain gases, a low-power wide area network and a platform with ML algorithms.  

Organizations such as Mada, a telecoms provider to the Middle East and Africa, the California Department of Forestry and Fire Protection and the UK’s National Trust are at various stages of piloting and implementing Dryad’s systems. However, there are many other geographical markets and opportunities, including health and growth monitoring of forests and the prevention of illegal logging and deforestation.  

As CFO, Beyer sees his mission as ensuring long-term financial stability and preparing the company to scale while keeping it focused on its chosen path.

How would you characterize the lifecycle stage of the company?  

We’re in a growth stage. We have 100-plus pilot installations, so there’s proof that the system works. A typical small pilot installation is between $50,000 and $200,000, and a “first-life” installation will cost $1 million to $5 million with a vast area covered with sensors. So, we’re at that rim, moving into full commercialization.   

We’ve raised $22 million in equity and have a good set of investors, some A-round venture capitalists and some corporates, like chainsaw manufacturer STIHL and TELUS, a Canadian telecom operator. Soon, we will start our next fundraising, which I think will be heavily oversubscribed. Let’s see.  

What are some of the challenges of being a CFO of a company in this early stage?  

Preparing the company to scale—putting in the structure. We’re setting up subsidiaries in the U.S. and Australia. So, there is some craftsmanship that we still need to do in the finance department. 

Operationally, in the early stages of industrializing a product, you need a reliable supplier that supports your idea and forgives all the engineering challenges. You either build the hardware yourself or, in our case, work with an EMS [electronic manufacturing services] provider that builds it for us. 

The other thing is, how do you handle working capital? Big municipalities or big corporates tend to have long sales cycles and don’t like to pay immediately. It always puts a bit of pressure on liquidity. You always need to have an eye on that…Having enough cash reserves to pay for the day-to-day operations is critical, obviously, and a continuous challenge for a small company with a small balance sheet. 

Do you have to hold any hardware products in inventory?  

A Dryad mesh gateway hangs from a tree in a forest
A mesh gateway from Dryad Networks

We need to have a certain amount of hardware in stock. Each EMS only has a specific production capacity—say, 5,000 sensors a week. Demand can peak if there’s a large installation, maybe an order for 100,000 sensors. That means going to multiple EMS. You need a second and perhaps a third source to cover the demand. Because we’re still a young organization, [the supplier] may ask for prepayments, which adds to the daily working capital challenge.  

How do you decide which opportunities and markets to pursue and which not to?  

As CFO, I’m working alongside the CEO to look outside the current box. What are the growth opportunities? Where are the right markets? I always tell my people we must learn to say “no” to many things. We can easily be distracted by investors, customers and others who are coming up with great ideas. They’re probably great ideas, but they’re not for us at this stage. Saying no is very, very important.  

So, where are your core markets—the ones you say yes to—and what is that based on?  

We look at our North Star. We want to help save more than a billion tons of CO2 by 2030 [equivalent to preventing three million-plus hectares of forest from burning]. This is what we’re selling to investors. We’re building the organization around that goal. That’s the big story. But we also need to make some money. We need to show revenue. We need to be successful commercially.   

For that, we have to be in countries where there are, unfortunately, plenty of wildfires, where there’s enough money to invest in our kind of technology and where they’ll be open to the new technology. Simple criteria, but if you apply them, you’ll end up with the United States, Canada and Australia.  

Other countries have big issues with wildfires—Africa, China, Mongolia and some places in Southeast Asia—but they may not be open to the technology or don’t have the programs to fund the projects. So, they’re not our priority; we just can’t do it. Being laser-focused and very clear about what you want to achieve and drawing those conclusions is instrumental.  


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