Commercial drone development inspires startups and attracts VC money

By June 20, 2013
drone flight with blue sky

The commercial market for unmanned aircraft is about to take off, and a whole startup ecosystem is emerging to develop software and systems to support the development of this fledgling aerospace sector.


Still the stuff of science fiction only a few years ago, unmanned aircraft are today a recognized reality in the military sphere and are now increasingly being developed for the commercial market. The sight of drones flying on peaceful missions across the American skies isn’t yet commonplace however, mainly because not many organizations have as yet received the necessary authorization to build their own remote ‘air force’. Nevertheless, the US Congress recently asked the Federal Aviation Administration (FAA) to start putting legislation on drones in place, and this should be ready by 2015. Within three years the commercial side of the industry is expected to see strong growth, and some startups are already betting on it. From hardware to software and apps, more Silicon Valley entrepreneurs are starting to focus on drones - and getting big money for it.

New niche for startups

Major development in the commercial drone market now demands new software to help deploy, control and manage these unmanned aerial vehicles and a number of startups are already working in this area. Construction costs for some types of drones, for both the hardware and the software, seam to be coming down substantially. “We can offer military technology at the price of a toy,” promised Chris Anderson, former editor-in-chief of Wired magazine. 3D Robotics, the company he has set up, designs and manufactures DIY UAVs that are simple to use and can be personalized. Other companies, however, are working with technologies that are far more rigid and closed, at much higher prices. Along with the open-sourcing and mainstreaming of hardware, other startups focus on software and OS. Airware, based in California, specializes in the development of autopilots for unmanned aircraft systems. Drone Deploy, a start-up from the same state, has begun to develop a software platform for web-based drone control and management. It lets users control a fleet of drones, identify defective ones, and even has social features.

Strong business potential

A recent study from the Association for Unmanned Vehicle Systems International (AUVSI) based in Arlington, Virginia, looked at the impact commercial drones are likely to have on business. The report finds that the areas most likely to make extensive use of unmanned aircraft are precision farming – a remote-agriculture approach that uses aerial photos, often from satellites, to monitor and adjust crop progress – and public safety services; these two segments would account foraround 90% of the market. Apart from these the AUVSI report cites prospects for use in freight transport, meteorology, air cartography, oil exploration and media coverage. The study’s authors reckon that the first three years following the integration of unmanned aircraft systems into the US national airspace system will create some $13.6 billion for the US economy, a figure that could reach over $82.1 billion between 2015 and 2025. This strong growth in the unmanned aircraft industry is also “poised to create” a large number of new jobs – close to 70,000 during the first three years – predicts AUVSI. Silicon Valley VCs are certainly aware of those numbers, as some start to invest in drone focuses startups: Andreessen Horowitz and Google Ventures have invested $10.7 millions in Airware.

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