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The big drone companies are investing millions to create new drone startups

The big drone companies are investing millions to create new drone startups


DJI and Airware are handing out cash to bolster the industry around themselves

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Three weeks ago, DJI became the most valuable consumer drone company on earth when the venture capital firm Accel invested $75 million in the company. Today the partnership between the two parties deepens, with the announcement of the Skyfund, a joint initiative to invest in drone startups and more broadly across the booming field of robotics and intelligent machines.

Make it rain

They aren't alone. This morning Airware, one of the better-funded drone startups in Silicon Valley, announced it was launching its own venture, the Commercial Drone Fund, with plans to pour millions into exactly the same strategy. The fund will be overseen by Airware CEO Jonathan Downey. It announced the first two recipients this morning, RedBird and Sky Futures.

Both companies are attempting to position themselves as a platform for the burgeoning drone industry. By handing out cash and access, they hope to become the center of a new wave of startups and services, much as the iPhone and Facebook served as the foundation for countless new mobile and desktop apps. "With UAVs and robotics, years of pent up academic research in computer vision, batteries, AI, and navigation now has a vessel for commercialization," said Skyfund's creators. "A legion of entrepreneurs who historically were tethered to government and university labs," are now poised to strike out on their own.

The Skyfund won't just provide entrepreneurs with cash, but also "technical expertise and early access," says Sameer Gandhi, the partner with Accel who led the recent investment, "and, when they come up with a killer app, co-branded marketing from DJI to the world’s largest community of fliers."

Sharing access to cutting edge technology

DJI released its first software development kit, or SDK, in November of 2014. Since then it's seen developers build new applications around services like 3D mapping and precision agriculture. It's hoping to find opportunities to invest, "in companies that will push the market forward with technology right now we have no capacity to build," says Michael Perry, DJI's head of communications. While the company has been on the cutting edge of consumer drones, so far it has released little in the realm of sense-and-avoid technology, which many believe is the key to the next generation of more autonomous units.

Having DJI as a backer could be a double-edged sword for young drone companies. While they would get access to some of the cutting edge technology in DJI's pipeline, that flow of information would likely be expected to cut both ways. Perry said there would be an arbitration process in place to handle intellectual property disputes. "Sometimes companies will get proprietary access, sometimes not, those are normal conflicts," said Gandhi.

Can you be the top hardware maker and also the operating system?

The same issues may arise with Airware, although it seems less likely, given that it doesn't make any of its own drones. "While the commercial drone industry is evolving rapidly, we still see gaps in the ecosystem," says Downey. The goal is to "identify and boost the rising stars that are advancing important drone-related initiatives, such as powerful new sensors, intelligent analytics, or innovative field services. As they scale across use cases and geographies, there are more opportunities for us to do business together."

Downey didn't mention DJI by name, but he did point out why he felt Airware was better suited for creating the biggest platform for the drone industry. "Our clients want to use drones from multiple manufacturers," he said. "I think inherently, building out the best operating system in an industry requires you to be agonistic to the hardware underneath, and that is fundamentally at odds with being a key manufacturer."