Morning Report: DroneBase picks up $12 million more from USV, Upfront Ventures, Hearst Ventures, Pritzker Group, and DJI.
Prior investor Union Square Ventures co-led the round with Upfront Ventures, another previous investor in the Santa Monica-based drone operations business. Chinese drone company DJI took part in the Series B as well. DJI has invested multiple times in the startup.
Y Combinator put the first external capital into DroneBase, according to Crunchbase. That shouldn’t surprise. As Crunchbase News previously reported, Y Combinator has been a leading player in the drone investing game. From our prior coverage, the following chart shows early investors in the drone startup wave:
DroneBase itself is a commercialization play on the rise of drones. The firm’s press release detailing its new capital claims that it is “the largest global drone operations company” and has now “completed over 100,000 commercial drone missions for enterprise clients.”
Eye-catching about DroneBase is that its business model, and its respondent ability to raise capital, indicate that drone tech is no longer a slurry of consumer-grade toys, Intel-powered demos, or attempts at a comeback by fading, public camera companies. Instead, DroneBase appears to be a bet that the commercialization of drone tech for a myriad of end-consumer businesses is a now affair.
The company currently touts its ability to secure drone footage for real estate, insurance, and construction companies. Industries, in other words, with large, complex, real-world products that need eyes often.
The Drone Business
On the sector maturity point, I asked DroneBase about the impact of regulation on its business, specifically if it is a material hindrance to its growth. The firm said that “as of late, there has been more structure in the [drone] regulatory environment.” Work by the Federal Aviation Authority’s “recent LAANC initiative (Low Altitude Authorization and Notification Capability),” the firm continued in an email, “provides instant airspace clearance in U.S. controlled airspace near select FAA facilities.”
It seems faster airspace clearance means more flights.
DroneBase did not answer questions regarding its financial performance. But flush with a fresh cash infusion, the firm will likely spend the next year investing in its business. That’s not the precise moment you want to discuss your short-term cash flow.
What will be interesting is what level of maturity the drone market will have reached when DroneBase needs to raise its Series C. The firm is betting on not just the technology and regulatory environment each being in place for continued drone commercialization, but it is also betting that demand will rise sufficiently for it to keep growing into its next, higher valuation. If that sounds risky, bear in mind that not every startup needs to sell enterprise SaaS with a focus on 90%+ gross margins, negative dollar churn, and, excuse me, I fell asleep.
Regardless, it’s a good day for LA’s startup scene. (More on LA here if it’s your sort of place.)
From The Crunchbase Daily:
- Alphabet, the most prolific corporate investor in startups, shows no signs of slowing. A Crunchbase News analysis found that last year the company’s assorted investing arms participated in 103 deals, topping historical highs from 2014.
- HeartFlow, a developer of technology for diagnosing heart disease, has raised $240 million in a Series E round led by Wellington Management and Baillie Gifford. To date, the 10-year-old, Silicon Valley company has raised more than $470 million.
- The battle for dominance in the bike-sharing space continues. The latest to expand its arsenal is LimeBike, which raised $70 million in an extension of its Series B financing. Real estate VC Fifth Wall backed the round, as LimeBike plans more focus on partnerships with commercial property owners.
iStockPhoto / primo-piano
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