Money Talks: Drone Investment Trends Update

Drone investment trends update:

Earlier this month the thermal imagery manufacturer FLIR bought the UAV developer Aeryon Labs for $200 million, beating their previous record in publicly disclosed drone investments of $134M. This has been yet another signal that even though the drone industry suffered some hard hits in 2018, the period of consolidation, larger investments and serious R&D advances is ahead. In fact, if one were to look at merely the investment figures for 2018, it wouldn’t even be that easy to tell that the drone industry struggled.

Records were set, partnerships formed, and accelerators continued to support exceptional start-ups. A total of $702 million was invested into the drone industry in 2018 (up from $625M in 2017), $483 million of which was funnelled into the top 20 drone deals. Looking at the top 5 alone, it is clear that these drone investment trends reveal broad shifts and growth in the drone industry.

• Since 2008, $3,163B have been invested into drone companies

• 2018 was yet another record year with $702 million total invested through 159 investment deals

• Since 2014, the total and annual global investment value has been growing at a constant level of 23% CAGR

Early in 2018, Joby Aviation announced that they raised $100 million from a variety of investors including giants like JetBlue, Intel and Toyota. Known for its secretive nature, the company is reportedly developing an air taxi prototype in California.

Just days before Joby’s announcement, PrecisionHawk announced that it raised a $75 million round of funding form a group of investors led by Third Point Ventures. This brought PrecisionHawk’s total funding to more than $100 million since being founded in 2010, a huge boost for this already well established industry leader.

Coming in third is one of the most innovative young companies in the drone industry, Skydio, seeking to make “the world’s most advanced autonomous flying camera”. Created by ex-Google engineers, Skydio raised $42 million in its Series B funding round bringing their total funding $70 million to date.

The Israeli platform manufacturer Airobotics continued to make noise on the drone market, securing $30 million in a new round of financing. The funding wasn’t the only good news for Airobotics – they also secured a BVLOS waiver from the FAA in 2018. Perhaps unsurprisingly as they were the first company in the world to be authorized to fly fully automated drones without a pilot.

San-Francisco based software manufacturer DroneDeploy has been a leader in the field of mapping and surveying for some time now. In 2018 they raised $25 million in a Series C round led by the Invenergy Future Fund. This almost doubled their previous funding total of $31, allowing them to expand their data platform into new verticals like insurance and increase their product portfolio.

Hendrik Boedecker, CFO & Co-Founder of DRONEII

Last year brought the total of funds invested into drones since 2008 to $3,163 billion, so what now? What can we expect in 2019?

Looking at the different deal types and their frequency per year, it is clear that early stage funding like product crowdfunding is losing traction and that more investors are focusing on funding more mature companies through VC deals. This reflects a maturing drone market; it shows that investors are ready to spend more money on the technology as well as that investing in drones does not necessarily have to mean exposing oneself to high risk.

2019 will likely see this trend continue as more mature companies close higher end deals and establish themselves as industry leaders.