Who is the biggest drone investor? It’s not based in Silicon Valley

The biggest drone investor is not one of the major Silicon Valley tech giants. In factor, the top venture capital investor in the drone industry isn’t even located on the same continent as Silicon Valley.

While Silicon Valley venture capital giants Y Combinator and Andreessen Horowitz are the third and second largest drone investors, respectively, in terms of investments made the number one biggest drone investor based on number of investments is the Drone Fund. That’s according to a November 2022 analysis from German-based analytics group Drone Industry Insights (DII).

DII broke down the largest venture capital investors based on number of investments made since 2010. Note that this ranking is based on investment deals made, as opposed to dollar value of investments, which could likely lead to an entirely different ranking.

And the top investor by deals made was Tokyo, Japan-based Drone Fund, which has made 22 investments since DII starting tracking companies 2010 (and really, since just 2017, as the five-year-old venture capital fund wasn’t even around in 2010).

Unlike Y Combinator and Andreessen Horowitz, which have invested in 15 and 18 drone companies, respectively, amongst its wide portfolio of companies, Drone Fund focuses entirely on, well drones. Drone Fund also particularly emphasizes air mobility with its portfolio, as well as new companies (68% of its portfolio is made up of early-stage funding).

Y Combinator is most famous for investments in household names including Airbnb, Coinbase, Cruise, DoorDash, Dropbox, Instacart, Reddit, Stripe and Twitch. Andreessen Horowitz has invested in what are now tech giants including Airbnb, Box, Facebook, Instagram and Waymo. Though, the big players have equally-big drone companies to their name. For example, Andreessen Horowitz is an investor in follow-me drone company Skydio.

Drone Fund is also relatively unique in that it’s not based in the U.S. In DII’s Top 1 ranking, eight of the top drone investors were based in the U.S. (the other non-U.S. firm on the Top 10 list is OurCrowd, which is based in Israel).

DII put the entire ranking into a single infographic, which you can download here.

The infographic shows deals by year, which illustrates how venture capital investments have mostly increased ever since 2013, when Amazon founder Jeff Bezos appeared on 60 Minutes promising drone package delivery during a segment timed around the Black Friday shopping season. In fact, investment in drone companies has set fresh records every year since 2013, according to data tracked by German-based drone analytics and research group Drone Industry Insights.

That said, it’s looking like drone investments based on number of deals made will have peaked in 2021, which saw 124 investments total. DII said it anticipates that 2022 will not break the record of deals set in 2021 (though 2022 is still set to outpace every year before 2018 in terms of number of deals made).

For what it’s worth, 2021 was an incredible year to top. 2021 drone investment figures nearly tripled the investment dollars that came out of an already record-breaking 2020. In a separate analysis also tracked by DII, there were 199 investment deals involving a drone company in 2021, amounting to nearly $7 billion in combined value.

It also breaks out investments by a few categories, which are:

  • Venture Capital Investments
  • Mergers & Acquisitions (M&A)
  • Other Investments (for instance: Initial Public Offering (IPO), Private Investment in Public Equity (PIPE), Grants, etc.)

The blue line, M&A deals, saw a high in 2021, but they are still relatively high in 2022, a trend that DII says is encouraging, as it “will hopefully allow more and more companies to scale their operations.”

Where do the biggest drone investors put their money?

Perhaps this is unsurprising given the nature of the work, but hardware companies received more funding than software companies — at least among the 10 largest venture capital investors.

Hardware received a 70% share of total investment from all investors worldwide, according to DII. Drone service providers took a 17% share, while drone software companies took just a 17% share. Those numbers also correlate with the sectors of the drone industry that are doing the most hiring.

A 2022 analysis also by DII looked at open job postings to find where the drone jobs are. Drone Industry Insights scoured job sites including LinkedIn, Indeed, StepStone and individual company career pages between April and May 2022, and found a total of 1,004 open positions. Here’s how they broke down:

  • 46% of job postings are by drone hardware manufacturers (461 total job openings)
  • 37% of job postings are by drone service companies (374 total job openings)
  • 17% of job postings are by drone software companies (169 total job openings)

The majority of companies that took money were also pretty new, with 54% of total investment deals going toward early-stage funding.

Learn more about the biggest drone investors directly from DII’s analysis here.

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