If Y Combinator is any indication, there is still money to be had in investing in drone startups.
Three drone startups participated in the Y Combinator Demo Day this month, showcasing enterprise-focused drone companies working to improve inspections, emergency response and warehouse inventorying.
Y Combinator is an American seed accelerator that has spawned many successful companies including Dropbox, Airbnb, Coinbase, Stripe, Reddit, and Instacart. And among the latest companies they have invested in? Paladin, which deploys drones to 911 calls, Corvus Robotics, which makes indoor drones for warehouse inventorying, and Sterblue, which focuses on drones for infrastructure inspections.
They aren’t particularly sexy companies, and they aren’t nearly as eye-catching as some of Y Combinator’s other investments this cycle, such as a wearable device that tucks into sports bras and claims to be able to detect breast cancer, or a plant-based meat-substitute maker.
But the three drone startups that were featured through Y Combinator this year offer a markedly enterprise-focused approach to drone companies. For example, Paladin claims its drones can automatically deploy to emergency response scenes and provide first responders with a live feed of what is happening. First responders have been major adopters of drones; at least 910 state and local police, sheriff, fire and emergency service agencies in the U.S. now have drones — an increase of 82% over the last year. For example, firefighters use drones to see through smoke via thermal imaging cameras, to monitor ground crew locations, identify smoldering hot spots and see current fire conditions.
French drone startup Sterblue claims to allow drones to easily inspect large power lines or wind turbines with simple automated trajectories that can get a job done much quicker than it would take a human to do. It’s not exactly a new concept for the drone industry and it does look to have some competition with other drone startups in the inspection space such as the already well-funded Drone Deploy and Skycatch. But given that experts seem to all agree that drone software is still ripe for improvement, Sterblue’s integrated software solution could prove to be a much needed tool in the drone industry.
The three startups received funding as part of Y Combinator’s semi-annual three-month funding cycles, which run from January through March, as well as from June through August. Each cycle culminates in an event called Demo Day, where startup founders present what they have been working on to more than 400 investors during a 3-day event. The most recent demo day was held from Aug. 20-22 at the Computer History Museum in Mountain View, Calif.
Y Combinator’s past drone investments have included Aerones, which was part of the Winter 2018 batch of startups and aims to build giant drones with 28 motors and 16 batteries, capable of lifting up to 400 pounds.
Other past Y Combinator drone investments have seen varied success. Vertical, which received funding in Winter 2015, pivoted from drones to augmented reality. Drone delivery startup Flirtey, which received funding in Summer 2015, had received some criticism for its “one-off drone delivery publicity stunts,” such as a partnership with Domino’s Pizza, which only actually delivered four pizzas within the first five months of its launch and was only able to deliver to buildings within 1 mile of a single store in Whangaparaoa, New Zealand. But Flirtey has also attained success in landing a spot as one of the Federal Aviation Administration’s Unmanned Aircraft Systems (UAS) Integration Pilot Program, an achievement that not even Amazon attained.
DroneBase, which received Y Combinator funding in Winter 2015, has grown rapidly, especially in the past year, having raised additional money by DJI, and launching partnerships with big companies like Airbus Aerial and stock photo site Shutterstock.
But if Y Combinator’s latest investments are any indication, there is still growth in the enterprise space. Drone mapping software startup DroneDeploy reported that enterprise drone use grew 5x in 2017, led by the construction industry. And the FAA has predicted that more than 420,000 commercial drone pilots will be licensed by 2021. The total number of drones registered in the U.S. through the Federal Aviation Administration topped one million back in January 2018.
Do you think the latest batch of Y Combinator drone investments will be a success? Leave a comment below!