Airware And DJI/Accel Launch Drone Investment Funds

Next Story

Metal 3D Printing Startup MatterFab Raises $5.75 Million From GE Ventures

Airware makes a flexible drone operating system. DJI makes the top consumer drones. But they need to bundle up with industry-specific hardware and software makers to sell whole commercial drone packages to big construction, oil, and insurance companies.

So by some cosmic coincidence, both are separately launching commercial drone investment funds today.

Airware is announcing the Commercial Drone Fund, which will invest $250,000 to $1 million in dozens of early stage startups that are building out other components of the enterprise drone ecosystem. The fund’s first two investments are in RedBird, a Paris-based drone data processing startup, and Sky-Futures, a London company that builds drone sensors for monitoring oil and gas infrastructure.

Katty_Thermal_1-copy

Meanwhile, DJI and its big investor Accel are anncouncing SkyFund, which will invest $10 million in early stage startups around drone, robotics, machine intelligence, computer vision and navigation, and multimedia communities. Specifically, it will focus on backing developers bulding on DJI’s software development kit.

If DJI and Airware can accelerate development of the other pieces in the commercial drone puzzle and become true platforms, they’ll ensure potential customers have everything they need to buy their drones and operating system.

Airware’s Commercial Drone Fund

Airware has raised over $40 million to scale its drone flight computer, operation software, and cloud data system.

Rather than invest from its own balance sheet of venture capital, or simply co-invest with traditional firms, Airware raised a separate fund from a set of limited partners. Airware’s founder and CEO Jonathan Downey will be its general partner. The fund’s size and LPs aren’t being disclosed, but the backers may include traditional VCs, as Downey says they’re open to investing in follow-on growth rounds beyond the fund.

“In the same way Airware’s platform is acting as a catalyst on the technology side of things for companies looking to deploy drones for commercial applications, we’re launching the Commercial Drone Fund to help catalyze these companies in a different way — by investing directly into them” Downey tells me. “These are technologies that are critical to scaling commercial drones.”

screen-shot-2015-04-16-at-6-06-22-amThe commercial Drone Fund will concentrate on five areas over the next two to three years:

  1. Sensor Hardware – to improve the precision, speed, cost, and scale of what data drone can collect
  2. Software Applications – that make deploying commercial drones easier
  3. Cloud-Based Aerial Data Analysis Tools  – for pulling insights from the data collected
  4. Drone-Based Services – including companies that fly drones or sell data
  5. Complete Solutions For Specific Industries – that pull together different hardware and software systems into full packages for commercial customers

Portfolio companies will get access to Downey, who built drones for MIT and Boeing, and help raising additional funding. Airware’s own investors, including Andreessen Horowitz, First Round, Kleiner Perkins, Google Ventures, and Felicis Ventures, give it plenty of connections to share.

DJI And Accel’s SkyFund

Accel invested $75 million into DJI this month, sparking this new partnership. Skyfund will make $250,000-plus investments in early stage drone startups through convertible notes or traditional seed and Series A rounds. DJI and Accel will have the option to make follow-on investments. Here’s a feel-good promo video SkyFund made. Re/Code’s Carmel DeAmicis first reported the two would form a fund

Screen Shot 2015-05-27 at 8.06.13 AM

Along with a closer relationship with DJI’s hardware business, portfolio companies will get access to expert advisors, including Dropcam founder Greg Duff, former head of Facebook product management Sam Lessin, Twitter director of developer platform Jeff Seibert, and Emmy award-winning TV producer Dick Wolf, who has used drones in shows like Law & Order.

Both Airware and DJI seem to have realized that the drone industry is too big and the use cases too broad for a single company to build the whole technology stack. Instead, both are trying to become platforms, making flexible core software and hardware that can be customized for niche needs in different verticals. Just like Apple or Facebook didn’t try to build every end application, these drone giants are trying to become the foundation of an ecosystem.

Companies around the world are eager to replace dangerous and expensive helicopters, planes, and satellites, and dangling humans with drones. Airware and DJI could entrench themselves in this budding commercial drone business by building a network of startups around themselves. At this rate, Airware and DJI could emerge as the software and hardware titans of dronetech.