TOP20 Drone Operator Funding

TOP20 Start-up and Venture-Capital Funding of Drone Operator

Drone Industry Insights | Drone Operator Funding | Mar 2016

Authors:
Kay Wackwitz
Hendrik Boedecker Rev. 1.0 Mar 2016 2015 Drone Industry Insights, Hamburg, Germany, all rights reserved

Introduction
Besides the investments in already
established drone companies and
startups (such as hardware and
software manufacturing companies),
another niche that has attracted
investments in recent times are
professional operator firms. As the
technology for drone platforms (sense
& avoid, hybrid, etc.) and drone
equipment (cameras, detectors, etc.) is
improving, more and more businesses
will spring up.
Even though the legislation of
unmanned aircraft systems has not yet
reached its final state, a total of $53.8
million was invested within the last
four years and the trend is moving up
considerably.
Most of the operators all over the
globe fly in accordance with local
regulatory rules such as flying within
the line of sight and other individual
constraints. This means that people
who run a drone operation today have
to adapt their business case to these
limitations in order to generate
revenues.
1.1 Definitions
The ranking considers commercial
UAV operator companies.
Definition of Operator Company: The
primary business vertical is to operate
drones for commercial applications.
The operator majority (>90%) are self-
employed or small firms. This report
focuses on those who run commercial
drone operation on an industrial scale.
2 Most Funded
Drone Operator
Companies
Besides several startups, a few
operator firms came up with innovative
concepts that seem to pay off.
Between 2012 and 2014, $6.3 million
were invested into professional
operator companies.
EXHIBIT 1: drone operator funding
2.1 Mavrx Inc.
($11.9 million | 4 deals)
After two funding rounds in 2012 and
2013 and with a small amount of
product crowdfunding and incubator
support, Mavrx a private &
independent software company was
2.2 Sky-Futures
($11.8 million | 4 deals)
The UK drone inspection specialist has
received a $4.2 million investment
from the Bristow Group, a provider of
helicopter offshore services. This move
is a good example of an integrated
approach for drone operation; rather
than being afraid to lose jobs to the
new technology, the company made
an early investment in order to secure
their future. The UK company, which is
approved by both CAA UK and FAA
333, operates several Chinese DJI
platforms and the German AscTec
Falcon 8.
2.3 Cape Productions.
($11.6 million | 2 deals)
This company specializes in drone
video service as well as creating
exclusive footage for paying customer
while performing sporty activities.
While many companies are still jostling
to get the approval of FAA, Cape is
among the few companies that have
the license to fly drones within the
500-foot range of customers, in the ski
resort of Squaw Valley, California, and
soon at many other feasible locations.
Supported by the Commercial Drone
Fund, Cape Productions has raised
$11.6 million in Series A in October
2015.
3 Markets & Region
3.1 Markets
As mentioned above, the commercial
operator segment is still very small
compared to the established hard-
and software manufacturer. If you
compare only the TOP20s in funding
(chart below), you see the massive gap
between each segment. This gap,
however, is beginning to close as
operators have begun to improve the
EXHIBIT 2: drone market funding per segment
To establish commercial operations,
you need to find the right equipment
(platform, autopilot, payload systems,
remote control, etc.) and follow your
regional rules. It is a long road to get
the business running and most
importantly, you must be ready and
willing to adapt to external influences
in order to succeed. Successful drone
operators have found their niche and
discovered a way to scale their service
under severe restrictions.
3.2 Region
Lets have a look at the regional
distribution of drone funding. Not
surprising, American companies lead
in all categories, and they receive up
to 77% of the total drone market
funding. Compared to the large VC
investments (for large-scale
production) from the USA and China,
startups and operators must have very
innovative concepts to obtain funds
from venture capitalists.
EXHIBIT 3: drone market funding per region
4 Appendix
If you want to learn more about the
investments in hard- & software
manufacturing companies, feel free to
peruse our latest articles via the below
links:
TOP20 Drone Startups to watch out
for in 2016
TOP20 VC-funded drone companies
to have on your radar in 2016
4 About
Drone Industry Insights (www.droneii.com) is a market research and analytics
company based in Hamburg, Germany. We provide insights, competitive
intelligence and market data for the commercial drone industry. Our consulting
services range from operational issues up to cooperate strategy solutions.
Drone Industry Insights can be contacted at info@droneii.com
Copyright
2016 Drone Industry Insights. All rights reserved.
This document is intended for general informational purposes only, does not take into account the readers specific
circumstances, and may not reflect the most current developments. Drone Industry Insights disclaims, to the fullest
extent permitted by applicable law, any and all liability for the accuracy and completeness of the information in this
document and for any acts or omissions made based on such information. Drone Industry Insights does not provide
legal, regulatory, audit, or tax advice. Readers are responsible for obtaining such advice from their own legal counsel
or other licensed professionals.
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The majority of drone operator
companies use third-party platforms
and systems, and some of them
operate their manufactured and/or
modified types.
All values are in US Dollar.
1.2 Limitations
Only funding deals with disclosed
amounts were considered. The
number and value of undisclosed
investments could not be considered.
In 2015, the number increased by
700% to $44.3 million.
Given the total investments worth
almost $10 million in the first quarter
of 2016 and a final version of
(American) regulatory framework, we
will have another record-breaking year
ahead of us. Drone operations just
like commercial airline business will
be the biggest market segment in the
future, and it will outrun all hard- and
software manufacturer both in value
and in growth rate.
able to secure $9 million VC-funding in
Series A in 2015. The crop specialist
extends its UAV operation with a
complete data solution, which helps
farmers to analyze the flight data and
to optimize their productivity.
2.4 SkySpecs
($6.1 million | 9 deals)
The inspection specialist of vertical
structures (like flare-stacks, wind
turbines, and cell/transmission towers)
fought its way up to become the
fourth most funded operator with a
$4.3 million funding in Series A in
November 2015. The company is
allowed to fly with FAA 333 exemption
since June 2015, and it aims to
provide completely autonomous
solutions for its customer.
2.5 Cyberhawk
($3.2 million | 2 deals)
The very recent deal in drone operator
funding was sealed on March 21,
2016, when Cyberhawk raised a $2.6
million funding package from
Clydesdale and Yorkshire Banks
growth finance team. Cyberhawk has
about 50 staff members, and the
numbers of its employees are
expected to increase significantly in
future as the Remotely Operated
Aerial Vehicle (ROAV) inspection and
survey company further expands its
drone and software businesses. The
UK company has also built a global
client base in oil and gas industry,
including all six super-majors, many
national oil companies, and
independent operators. By opening a
new North America office in Houston
later this year, Cyberhawk is set to
increase its market share and boost its
revenue.
efficiency of their services and as UAV
legislation becomes more lenient to
operators. The main reason the market
(and the amount of funding) for hard-
and software manufacturers is so big is
that they are not mandated to follow
any rules. Put simply, drones are
manufactured with a certain objective
and technology, and there are almost
no requirements from the aviation
authorities on what a drone has to be
equipped with (ACAS, redundancies,
etc.) or how it must be designed (fail
safe, etc.).
Flying a drone and capturing images is
a simple process, but refining the data
into something that is of a genuine
value to asset managers is the main
challenge for the industry. The value
chain does not end at the point where
the drone replaces manual inspections
(e.g., on bridges or wind turbines). In
fact, you will have to be proficient in
the whole process, including data
analysis, fleet monitoring and safety
management.
These driving forces are
predominantly found in North America
and Europe.
The relatively high share of UK
operators is due to the well-developed
risk-oriented legislation approach of
the UK CAA. Hence, these UAV
operators were able to gather a great
deal of on-site experience and prove
the high efficiency of drones
compared to using the traditional
methods. No wonder why they were
able to land great investment deals.