Venture capital investment into two Unmanned Aerial Vehicle (UAV) technology companies last week, and planned listings on agriculture investment platform AgFunder, thrust the sector into the spotlight this week.
Millenium Technology Venture Partners, the New York-based venture capital firm, led a $10 million Series B capital raising round for Precision Hawk, a producer of drone technology which transmits data about crops and more to famers’ mobile devices. The round was joined by incumbent investors, Bob Young, the Canadian serial entrepreneur) and Innovate Indiana Fund, Indiana University’s seed capital fund for technology start-ups.
Also last week, Drone Deploy, a company offering similar agdata services via drones to farmers, raised $2 million in early stage funding in a seed round led by Soft Tech VC, a technology-focused venture capital firm and including Data Collective, the Californian data focused VC firm.
And there are more deals in the pipeline, according to Rob Leclerc, founder of AgFunder, the fundraising platform. “We haven’t listed anything yet, but there may be a couple of opportunities coming on in the future.”
Concerns about regulation of the sector have been raised in the past as drones require various permits and there are moral issues in their widespread use but Samuel Schwerin, founder and managing partner at Millenium, is confident that drone technology will take off because regulation is evolving.
Drones are already commercialised and have been used by consumers globally since the 1980s, but restrictions have limited consumer use in the US. “Commercialization of drone technologies in the US is currently, somewhat artificially, limited given current Federal Aviation Administration regulations in place, but the market is far more mature internationally in region such as Latin America, Europe and Australia,” said Schwerin.
But there are positive signs that regulation around the world will soon better integrate drone usage, allowing drone manufacturers to grow. “While most countries currently allow flying on a permit-by-permit basis, we expect this to change in the next two years,” said Schwerin. “Regulatory bodies are continuing to develop a framework for drone integration, driven by increased recognition of their extreme importance going forward.”
Drone technology is not just being used in agriculture but in other sectors: PrecisionHawk has customers in insurance, government, oil and gas and forestry too. Although drone use is not yet an everyday occurrence, PrecisionHawk is already advanced in marketing and selling its drones to customers, according to Schwerin.
And this growing consumer base is what most investors are betting on, according to Schwerin.