2023 Drone Funding Stalls Big Time After Years of Soaring
In recent years, the drone industry has been a hotbed of innovation, attracting significant financial backing from venture capitalists and tech giants alike. However, 2023 saw a sharp downturn in drone funding after years of meteoric rise, according to an annual analysis by Drone Industry Insights (DII). In 2021, drone investment hit a peak, but by 2022, both the total number of deals and the amount of money invested decreased. This trend continued in 2023, with global funding for drone companies plummeting to just $1.67 billion, roughly half of the previous year's total. Despite this decline, it's important to note that 2023's funding still exceeds levels seen in years prior to 2021, indicating a maturing industry rather than a collapse.
One significant factor contributing to the drop in funding is the exclusion of investments in air taxi services, such as Joby Aviation, from DII's analysis. Joby's shift towards piloted electric aircraft capable of vertical takeoff and landing has led to its classification as an AAM/eVTOL company rather than a drone company. Additionally, most drone companies can no longer be considered startups, leading to reduced interest from later-stage venture capital investors.
While the decline in funding may raise concerns, it's essential to consider broader macroeconomic factors influencing tech investments, including high interest rates, inflation, and geopolitical developments. Despite the overall decrease in funding, some companies have continued to attract investments, with notable examples including drone delivery company Zipline and enterprise/military drone maker Skydio.
Looking ahead to 2024, a notable trend identified by DII is the increase in partnerships between drone companies and non-drone companies. These collaborations are expanding into new markets and driving innovation across industries. As the drone industry evolves, partnerships offer a promising avenue for growth and development, demonstrating the resilience and adaptability of drone technology in a rapidly changing landscape.
