Skydio, an autonomous drone manufacturer, has raised $230 million to expand its factory 10-fold, enhance R&D, and increase its sales and customer support budgets. The fundraising reflects growing private investor interest in backing defense-related technology, a trend that has intensified following Russia’s invasion of Ukraine. Skydio’s drones are now being used by the Ukrainian military to document damage to buildings, compile evidence of war crimes, and capture images of complicated terrain before sending in troops. The company plans to expand its offerings to more businesses and government agencies after the fundraising.
Government and Defense-Related Technology Companies
The recent years have seen a new trend of investing in government and defense-related technology companies that includes drones. Some of the big-name billionaires putting money into the industry are Eric Schmidt and Peter Thiel, along with VC firms like Andreessen Horowitz, with investments targeting a variety of functions, such as border security and data analysis.
Lockheed Martin Ventures, a Skydio investor, said that many startups find that a US government agency is a “pretty good customer.” Lockheed Martin Corp. is also a Skydio customer. The CEO of Skydio, Adam Bry, spent a full year raising the funding round, which proved challenging as the capital markets cratered in 2022.
Skydio has raised funds from individuals including sports legends Magic Johnson and Kevin Durant, and singer Justin Timberlake. Other backers include Andreessen Horowitz and Linse Capital, along with corporate investors like Nvidia Corp., NTT Docomo, and Siemens AG.
Skydio will use its latest cash infusion to expand production at its Hayward, California, manufacturing facility, boost R&D, and increase sales and customer support budgets. The startup recently began offering a fully automated docking system that protects drones from harsh conditions. The hardware lets customers with far-flung oil rigs, cell towers, and other infrastructure remotely launch and recharge its products with no onsite operator.
New R&D projects will likely include ways to help customers use the images collected by the drones, an area that experts say is still in its infancy. Robin Riedel, McKinsey Global Leader of Disruptive Aerospace, said that as the technology becomes more important in battlefields, drones made by geopolitical rivals pose a security risk to US allies. Riedel also mentioned that the integration and use of data is the biggest challenge in the industry. Skydio’s newest strategic investor, Axon, has its own system that it sells to its law enforcement customers.
Revamping Old Industries
Skydio’s CEO acknowledged that there were opportunities to revamp old industries in addition to expanding its core business. The company has focused largely on developing technology that pilots the drone and left it to customers to decide how to handle organizing and analyzing the images collected.
The drone industry has grown significantly over the years, and the rising interest of investors in backing defense-related technology companies like Skydio highlights the industry’s potential. With expanding production facilities and increasing R&D, Skydio is positioning itself to be a key player in the autonomous drone market, with the aim of revolutionizing the way businesses, governments, and militaries approach and interact with drone technology.
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