Drones Could Fly High, Thanks to a New $2.2B Fund

(Source: upstart.bizjournals.com)  

For all the hype, drone development is pretty slow going. But a D.C.-based investment banking firm hopes to give it a boost with $2.2 billion in funding from the private sector, most notably the aerospace industry.

The fund, dubbed the UAS America Fund, is the latest effort by Nexa Capital Partners LLC to encourage transformative concepts in transportation and aerospace that face an uphill battle financially. The company wouldn’t say how much of the $2.2 billion target it has raised or how much has been invested.

But a Nexa executive told me the concept works like this: Nexa asks the companies that manufacturer the unmanned systems, mostly for the Pentagon, to contribute to a fund that will support cash-strapped businesses developing new drone applications. The defense companies get new chances to target commercial opportunities and new technologies they can integrate into their own offerings. Or, perhaps, new acquisition targets.

“We’ve been watching the drone and unmanned system space for a couple of years now, trying to find the right time when it generates momentum,” said Jim Hughey, senior vice president at Nexa. “We think the time is here.”

Amazon gets credit for inspiring much of the recent dialogue about the potential of unmanned devices with its announcement that is hopes to deliver packages by drone someday, he noted, but this is about far more than those conceptual ideas.

“It’s bigger than what Amazon is doing. Amazon is working on things that are 10 years down the line, very grandiose,” he said. “But there’s so much activity going on now. It’s an industry that will transform our economy when all is said and done.”

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