Drone Investments Continue to Break Records

Another year has gone by, and drone investments have once again reached new heights. The years 2020 and 2021 brought recessions and uncertainty for various industries thanks to the pandemic, but they have also provided a chance for investors to put their money into the future. And the past three years of drone investments have shown one thing very clearly: drone technology is the future (and it’s already here). The latest edition of our annual Drone Investments Database provides the latest information on these transactions, and here are some of the highlights.

In 2021, we registered 199 investment deals involving a drone company. These deals amounted to a total drone investment value of almost US$7 billion. If we compare this to the previous year (2020: US$2.4 billion), it means that the total amount of investment once again doubled from the previous year for the second year in a row and this year it almost tripled. Within this record-breaking amount, the value of venture capital investment was almost US$4 billion, and the amount can also be broken down by drone industry segment as follows.

Drone Companies working on hardware received US$ 5 billion in investment, which also doubled compared to last year. The reason for this was yet another year of excitement and investing into passenger drone companies. These passenger drones received the highest amount of investment (US$4 billion, another doubling from last year) in comparison to the US$ 1 billion of all other drone hardware companies combined. Drone software companies received US$ 639 million, where investment on counter drones decreased compared to last year and investment on UTM companies increased to US$ 38 million (from US$13 million last year).

Meanwhile, drone service companies received US$ 1 billion, which is a substantial increase compared to last year (2020: US$ 160 million). The large influx of drone investments into these companies is not surprising given the heavy amount of activity in drone delivery. As in previous years, the top regions which attract investment in terms of value were: North America, Europe, and Asia, in that order.

Other ways in which drone investments can take place are in the form of an Initial Public Offering (IPO) and a Private Investment in Public Equity (PIPE). These saw a total investment value of US$ 2.63 billion, which was a substantial increase from 2020’s US$25 million. Moreover, 38% of total investment value in 2021 were IPOs/PIPEs, meaning that more than one third of drone investments were of this type.

It’s worth noting that the biggest reason why IPOs and PIPEs saw such a massive increase in activity was the increased attention being given to advanced air mobility.  The top 4 IPO/PIPE investments were all in the passenger drone sector, and the highest-grossing single IPO/PIPE deal in 2021 belongs to Archer, with US$ 857.6 million as part of their business combination SPAC deal with Atlas Crest Investment Corp (though Joby had a larger cumulative total). Given that many passenger drone companies plan on entering the market in 2024, we are likely to see a lot more drone investments for advanced air mobility in the near future, especially since the type certification that they need is an expensive process.

In terms of venture capital investments, Beta Technologies raised the highest amount of money in 2021, which accumulated US$ 511 million over the year.

Finally, we turn to mergers, acquisitions and partnerships. The number of mergers and acquisitions (M&A) for 2021 was 41, which also represented an increase from last year. Partnerships also saw an increase in activity. In 2021, we registered a total of 190 partnerships by drone companies. A vast majority of them (77%) were between a drone company and a non-drone companies, which should provide a good opportunity for drone companies to benefit from the expertise and network of companies outside the industry.

To this end, it makes sense that the most popular type of company to complete partnership deals was “drone delivery”, which complemented drone investments that went into this sector. Drone delivery companies partnered with companies that produced or distributed medical goods (e.g. COVID tests and vaccines), and we should expect this pattern to continue. The second type of company to achieve partnerships were those dedicated to UAM/AAM. Much like drone delivery companies, these depend on other goods being produced so that their services can provide the logistic value, and we can expect many more of these to find partnerships in the coming years.

If you want to learn more including a list of all deals in 2021 as well as investors, check out our full Commercial Drone Investment Database.