Doubling Down on DroneDeploy

Today, DroneDeploy announced its most recent financing — a $50m round led by Bessemer, alongside ourselves, Emergence, Energize, Scale and Uncorked Capital. We couldn’t be more excited to double down our commitment as this team continues its growth here in Australia and around the globe.

Since we first got to know the DroneDeploy team early last year we’ve been thrilled to see them emerge as a category leader in the commercial drone software space. Their customers have now mapped more than 100 million acres — that’s more than 3x the amount when we first met them last year, and now about the size of two Victorias (or 1.5 New Zealands!).

The Aussie Angle

DroneDeploy is headquartered in San Francisco, which may seem like it’s a bit of an unusual investment for us. As you’ll probably know, we spend most of our time backing great Aussie and Kiwi founders. But from time to time we do invest in companies that start overseas, but only when its a space that’s particularly relevant to Australia & NZ.

For DroneDeploy, there’s an obvious link. Australia is one of the largest commercial drone markets in the world, and is now DroneDeploy’s largest market outside of the US. In fact, part of this fundraise will be used to open an Australian office — its first presence outside of the US.

This makes total sense when you think about it. Their key verticals — agriculture, construction, mining and energy — together make up around a third of the Australian economy, which is a way higher proportion than in the US (roughly 20%).

DroneDeploy already has hundreds of Aussie customers from a huge range of industries. Some of these use cases are really cool — my personal favourite is the Great Barrier Reef Marine Park Authority, where they are helping to protect the reef against coral bleaching. DroneDeploy’s software enables coastal monitoring of the reef at a fraction of the cost of conventional aerial mapping, and does so with minimal human interference.

The Enterprise Law of Antigravity

From all the companies I’ve been involved with, I’ve found that it’s always been much easier to build a great product for small customers and then push upstream into large enterprises over time, then it is to go the other way around.

We call this the Enterprise Software Law of Antigravity.

DroneDeploy is a great example. The product was originally built for drone enthusiasts. They didn’t start with large enterprises in mind — they just set out wanting to build the best experience on the market for an individual drone pilot — it didn’t matter if they were on a mine, or a farm, or a construction site or if they worked for a big company or for themselves.

But this meant that when we first met the team, one of the big unproven questions was ‘can we sell this to big companies?’ Most of their customers were still monthly subscribers, with smaller contract values. But the team figured that if they could build a great product, they would eventually break into big companies.

Over the last 12 months they’ve gone and proven this out conclusively. In a short period of time, the enterprise segment has become its largest and fastest growing market.

We see the Enterprise Software Law of Antigravity playing out time and time again for startups. It’s usually way harder to simplify a complex product and move downstream than it is to take a great, simple product and add enterprise features over time. And if you start by focusing at the bottom end of the market, you can dedicate more of your resources to building a great product because you won’t need to pay for customisation, services, deployment, and high-touch support.

It may seem counter-intuitive, but sometimes getting a $1m+ ACV contract with your first customer can be the worst thing that can happen to you as a SaaS company. Often it’s better to do what DroneDeploy have done — start small, keep lean, and move your way upmarket over time.

A big congrats to Mike, Nick, Jono and the whole team on closing their series D. We’re stoked to be coming back in again and helping them expand their business downunder.

James, Craig & the AirTree Team