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The Fundraising Environment for Drone Start-ups

The Fundraising Environment for Drone Start-ups

The drone industry has emerged in the last ten years and has begun to accelerate in the past five. The first RC operated quadcopter came in the late 90s but the growth in the consumer, commercial, and military drone markets did not start until venture capital firms started funding drone startups in 2012 when VC funding stood at $10 million. The funding quickly multiplied and in 2016 VC funding grew to $223 million. Some of the biggest contributors of these funds include Lux Capital, Qualcomm Ventures, Andreessen Horowitz, Felicis Ventures, Google Ventures, and Social Capital. Before 2015, capital investments focused on drone hardware companies that were producing quadcopters and quadcopter accessories. When the enterprise market sprouted in 2015, drone software companies began emerging and the investments followed. Drone software companies do everything from mapping airspace to providing SaaS solutions to large enterprise customers. The growth in funding, sales, and drone use in general is expected to continue through the early 2020s.

These venture capital funds have allowed drone startups around the US to develop innovative new technologies to try and compete with overseas manufacturers. These investments were made on the firm belief that drone and UAV technology will play a huge role in shaping commercial industry in the future. As this belief cements itself in reality more every day, it would seem as the VC’s made the right call in determining an industry poised for explosive growth. Now it’s just a matter of these funded start-up’s finding traction in their relative industry segments and making the VC’s (and themselves) a lot of money.

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