Drone Sector Landscape Report
Introduction
Drones are defined as unmanned aerial vehicles.
The chief use cases of drones are in:
Consumer photography and hobby racing
Commercial inspections, surveying, cinematography, delivery, etc.
Military ISR (intelligence, surveillance & reconnaissance) and civil security & defence.
Drones can be rotary or fixed-wing or hybrid, manually piloted remotely or autonomous, motor-driven or engine-driven. This articles covers the subsectors and the companies investing in this market. The analysis is incomplete without pointing out that technological advances are what drives this sector.
Situation
Unmanned Aerial Vehicle or UAVs (as they are popularly called) have increasingly gained the
attention of the general population (buyers and investors alike) as they all scramble for a piece of this innovative solution. There have been reports of how drones are steadily being embraced, leading to a progressive evolution of this market. This boost is probably because of how efficient these drones are in other multiple sectors such as mining, tourism etc. There is a lot of innovation to be made here and nobody wants to be left out.
Problem
As brilliant and progressive as this sector is, there are certain problems that those in this sector face, either as investors or start-ups, here is a breakdown list:
The regulations from the Civil Aviation Ministry: There is a limit to the distance drones can fly up to, especially if they are owned by private companies.
The Business Model: There are already a lot of big names in this market. For a new start up to make a difference, a lot of innovative practicability and services would have to be
provided before they are duly recognised.
Image Resolution and Telemetry.
Implication
The regulations from the Civil Aviation Ministry: The limitation might not be a problem in
the long run but this poses a threat to the efficiency and innate possibilities of the drones.
Why waste the potential when it can actually be used to cover more distances?
The Business Model: This problem has actually discouraged a lot of start-ups and investors.
My take on this is that if your innovation can stand up against the major players in the
market it is worth a shot to give in your best into being a participator in this sector.
Need Payoff
Over 1550+ companies have been founded in the sector, approximately 185 funded in last 5 years, with about $512M invested in 2016/17. Techstars, Y Combinator, Andreessen Horowitz, Felicis Ventures, Qualcomm are the most active investors.
The subsectors here are:
1. Hardware: Designs & manufactures Unmanned aerial vehicle systems and complementary
solutions. There have been 432 registered companies in the past 8 years with an overall
funding amount of $3184M. There are 3 categories here:
Civilian: Manufactures unmanned aerial vehicles for civilian (consumer and commercial)
applications.
Hardware Parts & Peripherals: Manufactures hardware components for drones.
Military and Law Enforcement: Manufactures Unmanned Aerial Vehicle systems for military
applications.
2. Services: Companies that provide services using drones, divided by service application.
There have been 575 registered companies in the past 8 years, with an overall funding of
$286M in 2012/2015 business year.
The categories here are:
Horizontal: Provides services for multiple drone applications.
Aerial Photography and Surveying: Delivers aerial imaging & surveying using drones.
Industrial Inspections and Monitoring: Drone inspection services for industrial applications.
Precision Agriculture: Delivers field and crop monitoring services by drones.
Delivery: Provides delivery services using drones.
3. Software: Develops technology solutions for drone control and other multiple applications.
There have been 146 registered companies in the last 8 years with a funding amount of
$107M in 2012/2015 business year.
There are 2 categories here:
Ancillary Software: Software for fleet and data management.
Enabling Software: Software for operating drones; autopilot software.
4. Counter-Drone Systems: Drone Detection and Disabling Systems. There have been 31
companies founded in the last 8 years, with an overall funding amount of $71M in the
2012/2015 business year.
Interesting Companies in this sector:
PreNav (2014, San Carlos): They provide near-ground autonomy for drones. Their major
investors are: Crosslink Capital, WI Harper Group, Linden Mobile Ventures, Pejman
Mar Ventures, Drone.VC, Liquid 2 Ventures, CSC Venture Capital, Comet Labs, Pear
Ventures. They have an overall funding amount of about $7.7M.
Ehang (2014, Guangzhou): They develop drones for consumer and commercial use. Their
major investors are: GGV Capital, ZhenFund, PreAngel Partners, Shenzhen Oriental
Fortune Capital Management, LeBox Capital. They have an overall funding amount of
about $52M.
Conclusion
There is a lot of buzz in this sector of the economy, and a comprehensive study of the trends show us that the sky isn’t the limit when it comes to innovation and productivity of drone. This should encourage more start-ups to be creative, pooling investors to their ideas and products.
Speaking about the future of drones in India, Apurva concludes: “We also see a significant use of drones in the defence sector - which presently, in the Indian context, is limited to only surveillance.
Drones can develop to make the system more lean and effective. The medical sector will also see applications of drones in case of medical emergencies. Drones will be seen in kids’ toys sections and high tech defence labs. What should be, and will be, important here is the problem that you are looking to solve. If you are doing it more efficiently, you will survive and grow.”