It’s not big money yet, but drone technology has investors looking to the sky for pennies from heaven.
Venture investments last quarter hit an all-time high of $65 million as Airware and PrecisionHawk raised some of the first significant follow-on rounds to date. Seed rounds shot up in 2013 as 14 new drone tech companies closed their first rounds of funding.
Drone innovation is moving at light speed as entrepreneurs leverage the technology behind military combat UAVs to solve civilian problems, from commercial data capture to on-demand burrito delivery.
As drone tech stages a full-scale invasion of the commercial sector, venture investors like Andreessen Horowitz, First Round, and Google Ventures are among those placing early bets.
“Many transformational technologies seem like they come out of nowhere, but really the U.S. military has been spending many years and tens of billions of dollars on drone technology,” says Jeremy Conrad, former U.S. Air Force Officer and founding partner of seed stage hardware firm Lemnos Labs. “You just don’t see them in the civilian sector until the price points go down.”
Now the cost is low enough, but drone tech companies in the U.S. are currently facing another blocker in the form of legal restrictions from the Federal Aviation Agency.
While recreational use of drones is legal, the FAA prohibits commercial use of drones without prior approval. The agency has yet to release a final draft of rules governing commercial drone use, which has created a legal grey area for entrepreneurs as they continue building technology that, for the most part, hasn’t yet secured legal approval.
Alan is serial entrepreneur, active angel investor, and a drone enthusiast. He co-founded DRONELIFE.com to address the emerging commercial market for drones and drone technology. Prior to DRONELIFE.com, Alan co-founded Where.com, ThinkingScreen Media, and Nurse.com. Recently, Alan has co-founded Crowditz.com, a leader in Equity Crowdfunding Data, Analytics, and Insights. Alan can be reached at alan(at)dronelife.com