Worried that drones are just a hype bubble? Investors don’t seem to think so, as 2019 marked a record year for drone investment around the world.
More than $1.2 billion was invested in the drone industry across 157 investment deals, according to The Drone Investment Report 2020, done by drone research firm Drone Industry Insights. $830 million of the money comes from venture capital investments.
Not only is $1.2 billion far and away a record, but it also marks the first time investment for one year crossed the psychologically signicant $1 billion mark.
A huge chunk of that funding can be attributed to medical drone delivery service provider Zipline, which received an all-time record investment of $190 million in their Series C round in April 2019, which values Zipline at more than $1.5 billion.
Zipline has primarily focused on medical deliveries to developing countries including Tanzania, Ghana, India and the Philippines. But the California-based company turned their attention to the U.S. in the wake of coronavirus, using drones to shuttle PPE to medical facilities in North Carolina.
But while many eyes seem to be on drone deliveries (we’re looking at you, Chipotle burritos), investors’ eyes seem to be on drones that deliver humans. A huge chunk of the funding comes from passenger drone companies.
“Undoubtedly, as carriers of humans, passenger drones are and will continue to be subject to the very strictest certification and regulation requirements as well as the highest technological hurdles,” according to DII. “It is precisely because of this that companies are still in the R&D and prototype manufacturing stage, the one which requires the most money.”
And human-carrying drone investment will likely follow the same growth path into 2020. For example, Joby Aviation raised a $590 million Series C funding round in January 2020.
Another big chunk of that money went to flight software company PrecisionHawk, which announced a $32 million funding round in December 2019. That’s on top of the $75 million that PrecisionHawk raised in 2018.
Since 2008, more than $4.4 billion has been invested into drone companies.
But with all the growth comes consolidation. Between 2017 and 2019, the drone industry witnessed 79 mergers and acquisitions. Notably, US-based sensor manufacturer FLIR acquired platform manufacturer Aeryon Labs for $200 million.