Breaking Down The Drone Stack

Michael Dempsey
Mar 21, 2016 · 7 min read
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I’ve been studying the drone ecosystem in-depth for more than a year, initially resulting in the Future of Frontier Tech report I wrote at CB Insights.

Today, as an investor at Rothenberg Ventures, I’ve continued to dig deeper in an effort to identify the key opportunities emerging within each part of the drone stack.

As a team at Rothenberg Ventures, we’re continually honing our thoughts and speaking with experts across all areas of Frontier Tech. We operate with key beliefs across each sector that allow us to establish a baseline framework for evaluating the thousands of companies we see each year.

Our conviction for the drone ecosystem began in early 2014 when we seeded the drone operator marketplace, Dronebase, and continued with multiple investments in our most recent River class.

As we continue to invest in drone startups, we are developing multiple core beliefs surrounding drone infrastructure, services, hardware, and more. Some of them may change over time, but we thought it would be helpful to share our thoughts in the interest of collaboration within the drone ecosystem.

See below for a detailed breakdown.

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via Airmap

Regulation & Infrastructure

Applications we’re interested in funding:

  • Drone detection and defense. A proliferation of drones will inevitably lead to uninformed fliers in addition to bad actors. We’ve already seen attempted drone deliveries into prisons, near-misses with airplanes, crash landings at the White House, and more. The ability to identify and control rogue drones is critical moving forward. While some of this may be handled by ATC and fly/no fly information providers (like Airmap) at the hardware level, bad actors will always be able to remain off the grid to a certain extent. We’ve learned about the various potential workarounds for many of these systems, but that is no reason to not defend against the 99% of drone operators.
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Hardware

Applications we’re interested in funding:

  • Fixed wing & hybrid drones. Few players have attacked the consumer fixed wing market. The endurance afforded by fixed wing drones could prove that form factor superior for some enterprise use-cases, including long-distance logistics and surveying, as well as “macroscopic” monitoring. We also are continually tracking innovations in the hybrid form factor of fixed-wing with VTOL capabilities (like XCraft).
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Drone Services

Applications we’re interested in funding:

  • Data Analytics. Eventually we envision a world where most companies in an applicable industry, whether large or small, will own a drone. We’re actively looking at “last-mile” analytics companies that can take a wide range of datasets and provide insights to their customers, whether that is a small farmer willing to pay per acre surveyed, or a larger construction company paying on a per site recurring basis. The key is to be able to say “this is what is happening, and this is what you should do to improve your process.”
  • Full Stack Services. Companies that can provide a full-stack solution today will provide specialized hardware to software to insights (Kespry). If your stack includes specific technological IP related to an area (such as a sense and avoid tech that specifically targets wind turbine monitoring a la SkySpecs) this will help prove out your vertical approach and will show a key understanding of how you build better processes to scale within a specific vertical.
  • Logistics. This is a huge market that will not be solved only by large incumbents.
via Skydio

Enabling Technology

Applications we’re interested in funding:

HiveUAV
  • Endurance infrastructure. Battery-powered drones with 20–45 minute flight time will continue to present operational bottlenecks. We want to invest in startups looking to solve these issues with solutions ranging from automated docking and charging (HiveUAV, Skyfront) to swarm collaboration and more.
    Disclosure: We are investors in HiveUAV, a company which combines drones and automated docking stations to help multiple industries monitor remote locations from the air via automated docking and charging stations called “Hives”.
  • Sensor development. Operators will continue to gather more data, thus we are interested in startups innovating on the sensor payload to enable unique datasets via drones (like Quanergy).
  • Operator Marketplaces & Training. Not all drone use-cases will need consistent usage, however they still will be immensely valuable on a contract basis. As I previously mentioned, we are investors in DroneBase, one of the world’s first drone operator marketplaces. We are firm believers that low-cost drone services will have a lasting market and we have seeded what we believe will be one of the key players in that segment of the market moving forward.

Overall the drone ecosystem is still in its infancy, and thus these are dynamic core beliefs that will change as we learn more and continue to back great teams in the coming years. Whether you’re an entrepreneur working on an awesome drone startup, or someone who just wants to chat more, I’d love to hear from you! Reach out to me on twitter @mhdempsey or via email. No idea is too early and we’re always looking to help.

Frontier Technology

All about frontier technology including Robotics…

Thanks to Dylan Flinn, Neil Devani, and Sophia Dominguez

Michael Dempsey

Written by

Want to live in a better future so investing in Frontier Technology @compoundvc. Learn more @ www.michaeldempsey.me

Frontier Technology

All about frontier technology including Robotics, Autonomous Vehicles, Drones, AI, Space, VR/AR, and more.

Michael Dempsey

Written by

Want to live in a better future so investing in Frontier Technology @compoundvc. Learn more @ www.michaeldempsey.me

Frontier Technology

All about frontier technology including Robotics, Autonomous Vehicles, Drones, AI, Space, VR/AR, and more.

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