The drone industry has seen a spike in investments with venture capitalists showing increased interest. Data acquired by Finbold.com shows that by the end of 2019, total investment in the industry was a record high of $1.2 billion, a Year-Over-Year growth of 67 percent with venture capitalist funding standing at $930 million.
The data indicates that between 2008 and 2019 funding in the drone industry stood at $4.43 billion. 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. In 2008, the investment in the industry stood at $30 million before slightly dropping to $29 million a year later. 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 onwards the growth has been steady.
Interestingly, Venture Capital funding joined the drone 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 drone sector has been profitable in recent years. 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 drone 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, Microsoft among others. The research notes that even though different companies are receiving fundings 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.
Drone 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 project 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.