Venture Capitalists’ Investments in Drone Industry Rise 67%

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Investments in Drone

Venture Capitalists’ Investments in Drone Industry Rise 67%

  • Since 2008, $4,433 billion USD have been invested into drone companies
  • 2018 was yet another record year with $1,205 billion total invested through 157 investment deals
  • Since 2016, the total and annual global investment value has been growing at a constant level of 21% CAGR
  • In the period of 2017-2019 the industry experienced 79 mergers and acquisitions.
  • The steady rise of investments into counter drone technology is expected to continue, especially as drone security issues gained prominence in 2019
  • Similarly, passenger drone companies are likely to keep receiving the largest cash injections as Urban Air Mobility becomes an increasing priority.

Momentum is building in the drone industry according to latest data, drone industry insight (DII) has revealed.

Venture capitalists are putting significant funding into the segment as world leverage on technologies and related infrastructure.

According to the its 2019 report, DII stated that the global market will grow from $14 billion in 2018 to over $43 billion in 2024 at annual average growth rate of 20.5%.

Specifically, the drone market which has been evolving, has become clearer as VC funding is focused mainly on drone delivery, security, and mining.

This was a year on year growth of 67% with venture capitalist funding standing at $930 million.Investments in Drone

According to the data, between 2008 and 2019 funding in the drone industry stood at $4.43 billion.

However, by 2019, venture capitalists who joined the industry from 2010 had pumped in a total of $3.46 billion.

In general, drone investment through VC represented 68.87% of all funding.

Meanwhile, in 2008, the investment in the industry stood at $30 million before slightly dropping to $29 million a year later.

The industry’s data shows that there was a notable spike in the investment between 2012 ($42 million) and 2013 ($121 million) with a growth of about 188.1%.

From this point onward the growth has been steady.

Interestingly, venture capital funding joined the sector by only $2 million in 2010, a figure that has been rising to hit $930 million in 2019.

This is an indication of how the sector has been profitable in recent years.

Then, the interest from venture capitalists was notable between 2013 and 2014 when the investment grew by 122.5%.

Generally, on a yearly basis, the VC funding in the industry has ranged from $450 million to $550 million over the past four years before the 2019 spike.

The drone industry has been growing with investment being pumped in at least 52 companies.

Some of the big players in the sector include 3D Robotics, DJI, Toyota, Boeing, Audi, Airbus, DroneBase, and Microsoft among others.

The research notes that even though different companies are receiving funding from venture capitalists, most of them are based in the United States.

Notably, the drone market has been evolving to become clearer and now VC funding is focused mainly on drone delivery, security, and mining.

The focus on a few companies might be because venture capitalists are avoiding entities that can take long before paying off.

Industry to continue growing in 2020

Based on the trend set in the previous year, 2020 is expected to see an increase in the drone sector investment.

Furthermore, this year might see an increase in the number of investment deals.

The growth will be fueled by an increase in drone adoption across the globe accompanied by new emerging markets.

Experts are projecting that there will be an increase in the number of drone companies venturing into partnerships with non-drone companies to offer new solutions.

Drones use will continue being adopted in various sectors led by the traditional military where they offer safer, cheaper, and often more capable alternatives to manned military aircraft.

Additionally, consumers are also fueling interest in drones alongside commercial and civil use.

In general, drones are becoming popular due to their economic impact.

With a move away from military use, companies like Amazon are looking into the deployment of unmanned aerial vehicles for commercial purposes.

As the world focuses on environmental conservation, drones are also emerging as an alternative.

Powered by batteries, drones are more environmentally friendly compared to vehicles hence they can easily be deployed in various sectors like delivery.

Venture Capitalists’ Investments in Drone Industry Rise 67%