Skydio valuation tops $1 billion after new $170 million Series D round
Today marks a huge milestone for U.S. based drone maker Skydio. The company behind the crash-proof drone on March 1 announced a $170 million Series D funding round, bringing the total Skydio valuation to more than $1 billion.
Skydio says it will use the money to “further accelerate product development and global sales expansion to support the rapidly growing demand for its autonomous drone solutions.”
The company rose to the spotlight with its “crash-proof” drone thanks to sensors and all sides, allowing the drone to be fully aware of its environment (that’s in contrast to something like a drone with forward- and back-facing sensors that can detect objects it is approaching, but might not be aware of a tree branch in the corner that could cause a crash. The first consumer-focused drone, the Skydio R1 was certainly intriguing, but the company really took off with the 2019 introduction of the Skydio 2, which was far more ambitious — and user-friendly. Later in 2021, Skydio will release the Skydio X2, which is designed for enterprise audiences.
Skydio’s latest Series D funding round was led by Andreessen Horowitz’s Growth Fund, which also led the Series A. The company held a Series C funding round less than a year ago in July 2020, when it announced it raised $100 million, bringing its total funding at the time to $170 million.
“Autonomy is the key for drones to reach scale, and Skydio has established themselves as the defining company in this category,” said David Ulevitch, General Partner at Andreessen Horowitz. “We’re excited to continue to invest in this magical combination of breakthrough technology, rapid growth, and an incredible team in a market that’s going through an inflection point.”
It’s especially interesting to see this much money being infused into an American-based drone company now. Skydio is based in Redwood City, Calif., a city that makes up part of the state’s Silicon Valley. Its rise comes at a time when drone pilots (and the companies that hire them for work) are desperately seeking drones made in America.
Many private and government organizations in recent years have banned drones made in China, and some have banned all drones made outside the USA completely. The challenge is that currently China-based drone maker DJI reportedly has a market share exceeding 70%. And it’s easy to see why. DJI drones are relatively low-cost, they work well, and they’re easy to get your hands on.
Of course, remember that despite the seemingly masive Skydio valuation at $1 billion, DJI is still valued at roughly $15 billion.
Meanwhile, the history of American drone companies has been pretty bleak, and most companies that thrived on the early hyped around drones delivering pizzas to your doorstep quickly burned through venture capital. Berkeley, Calif.-based 3D Robotics was once a media darling, until it ate up $100 million in funding (the company has since pivoted to a much smaller, drone-service operation). GoPro tried to build its own drone and failed to make a product that worked.
Not to mention, drones are far less of a novelty now, and the same people who fantasized about Amazon drones delivering their purchases in 30 minutes or less don’t seem to care much about drones anymore (not to mention that Amazon ground delivery can often delivery packages this quickly now anyway).
But Andreessen Horowitz is looking past early mistakes made by other drone companies, and sees Skydio as being a strong long-term bet that could ‘change the world.’
“The initial wave of hype around enterprise drones passed many years ago, but we’re now seeing these markets really mature,” Ulevitch said. “From the moment we met the Skydio team and saw the S2 in action, we knew this was going to be a world-changing company.”
Skydio largely launched as a consumer tech company, but its technology shows promise in enterprise work.
“Think of all the dangerous jobs requiring ladders, harnesses, or helicopters to do work that can now, with Skydio, be done much more safely and efficiently,” said Bastiaan Janmaat, Partner at Linse Capital. “Autonomous drones will enable our aging infrastructure to be monitored much more effectively and our first responders will have greater situational awareness than ever before.”
Over the past year, Skydio has leaned in on government, military and enterprise work, including making a drone deal with EagleView for residential roof inspection. Its drones are used in major enterprise and public sector organizations including Jacobs Engineering, Sundt Construction, the US Civil Air Patrol, Ohio Department of Transportation, North Carolina Department of Transportation, Boston PD, and the Sacramento Metro Fire Department. It’s also a participant in the FAA’s BEYOND program.
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