Drone Startups Getting a Cold Blast of Reality

Bloomberg writer Jake Pitcher reported today that, “New commercial drone businesses flooded into the market at the start of the decade, flush with venture capital and giddy with visions of unmanned aircraft being used for everything from delivering packages to fertilizing farmland.

“Unmanned aircraft are still seen as a pillar of the future. But for now, all that over-heated enthusiasm is getting a cold blast of reality.

Some of the biggest startups began closing their doors last year after burning through hundreds of millions in venture capital poured into a fledgling industry that, despite forecasts for explosive growth, is taking longer to mature than expected. Dozens of others are getting swept up in a consolidation wave as drone companies search for a profitable niche in a rapidly shifting marketplace.”

The article stated that, “Once well-funded startups are struggling as hordes of self-employed pilots drive down prices, Chinese technology races ahead and non-drone companies across industry pull their unmanned aerial operations in-house. Federal regulation of the aircraft has been slow to catch up, and is holding back many businesses from expanding.”

Mr. Pitcher noted that, “But while some startups are testing investor patience, others are seeing an opportunity for growth. At least 67 drone startups have been sold since their inception, according to Crunchbase, which collects data on private companies. Buyers range from rival drone operators to companies in other industries, such as Verizon Communications Inc.”

The Bloomberg added that, “At least 25 drone startups have shut their doors this decade, with the largest burning through a total of $183 million in funding, according to Crunchbase’s online reports.

“‘The venture capitalists are less enthused now,’ said Dan Burton, CEO of Dronebase, a drone pilot network that’s held on through the turmoil.”

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