In Rise of the Drones (Part 1): The Basics, we explained the basic structure of the drone market and key terminology and architecture of drone technology systems. In this Part 2, we explain the part of the drone security and safety innovation stack that AlphaPrime focuses on, and highlight some of the early movers in this sector.

Investment Momentum

In early stage investing, timing is everything. Venture investment in the sector has been gathering momentum, as solution providers evolve from services-based models, to IP and technology driven platforms as customers mature in capability, and drone-to-drone business arrangements emerge. After an initial wave of drone 1.0 technology consolidation in the last 18 months, the growing customer receptiveness to drone solutions, coupled with a lifting of the regulatory fog is supporting the emergence of the next generation of “Drone 2.0” solutions: advanced interfaces focused on specific use case, coupled with sophisticated processing, analytics and insights.

AlphaPrime's Focus

At AlphaPrime, we focus on two key layers in the drone innovation stack: we stay away from capital intensive craft hardware, payloads and GCS innovations, and instead focus on the software layers. We are particularly interested to ensure ground operators maintain avionics and payload data control, and can securely and efficiently transmit payload data. In addition, there is a growing body of business applications that leverage drones to improve the safety or security of individuals or assets, which we believe will be one of the core drivers of growth in this industry.

At a macro level, drones are being both a solution to, and a cause of, safety and security concerns in the future and we categorize them accordingly:

OFFENSIVE APPLICATIONS: These drone based systems perform tasks that improve personal or public safety, or enhance asset security. This includes inspection and monitoring applications, search and surveillance, rescue and recovery, crisis response, and a broad range of risk assessment and management applications. Although governments are obvious clients for these products, these solutions are increasingly meeting commercial needs, developing industry-specific user interfaces, supported by primary and second order analytics.
DEFENSIVE APPLICATIONS: These solutions prevent or mitigate drones from being hazards in their own right and harming people or assets. The main customers re asset owners, financiers, insurers and law enforcement, with the solution set including kinetic and passive counter drone systems (including jammers and scramblers), flight planning and traffic management, collision avoidance systems, intrusion detection and response, and underlying insurance products.

100 Drone Safety and Security Startups

AlphaPrime tracks over 100 safety and security-related drone-startups globally, which have commercial application, and that we broadly categorize into 8 main groups (according to their primary focus):

This map only profiles companies that were founded in the last 10 years and have not been acquired/ gone to IPO. Due to our own investing preferences, our research focuses on English language businesses, although we expect there are operators in other jurisdictions that are not captured. This market map is not intended to be comprehensive, and certain vendors may not be profiled.

If you feel we have missed a company in this space, or you would like an opinion on a company you do not see here, please reach out to us at info@alphaprime.com.

About The Analysis: Our research leverages AlphaPrime’s proprietary data warehouse, Charlotte’s Web™ , that tracks thousands of companies that protect people and assets. This specific drone analysis was conducted in August and September 2016, with support from analysts Emma Yunqi Li and Matteo Cuda. Charlotte’s Web™ is the result of hours of painstaking research: from our first analyst (and the data warehouse’s namesake) Charlotte Kwon, to Matteo Cuda, Emma Yunqi Li, Nathan Coen and Marc Bove who have contributed to its data reserves over the years. We remember and remain enormously thankful.

About AlphaPrime: In an increasingly complex and dangerous world, threats to people and assets are escalating in diversity, frequency and magnitude. The need and ability to anticipate and respond to these threats is essential and universal. AlphaPrime invests in companies that address this need, and manage and protect people and assets. It’s not part of what we do, it’s everything we do.