UK’s top drone startups take flight

| Beauhurst

Back in 2016, we reported on the UK’s top drone startups, when an upswell in consumer interest seemed like it would lead to a similar increase in venture capital funding. Looking at past trends in the market, we predicted funding levels could reach £15m in 2017. We were slightly off on this; funding levels actually plateaued at £9.6m in 2017. However, funding almost tripled in 2018, to almost £30m. Whilst not a huge sum compared with the UK’s other fast-growing sectors, this represents a steep increase. If the trend continues, the drone sector could be the recipient of very significant levels of funding in the near future.

Fundraisings into UK drone companies from 2011 - Q1 2019

Investment in to UK drone companies 2011-2019

In the UK, drone companies operate in three subsectors: those that develop specialty drones for tasks in specific industries; software companies designing improved operating systems for drones; and those developing new types of drones altogether.  

Specialty Drones

The UK’s most successful drone startups to date have been those which develop drones for use in specific industries. Sky-Futures is Britain’s best funded drone startup, with £11m raised from investors including MMC Ventures and Japanese oil and gas giant Mitsui & Co. This company develops drones that can perform inspection on offshore oil & gas assets, cutting the need for staff to make the long and sometimes dangerous journeys to these remote facilities. Cyberhawk offers a similar product, but has expanded this to land-based energy facilities as well. Receiving its first seed round of funding in 2010, this startup had turned a profit by the 2018 financial year, and was promptly snapped up by Magnesium Capital, a PE firm specialising in the energy sector.

SenSat, the recipient of over £4m worth of risk capital, is one of the UK’s top drone startups, providing high resolution imagery to businesses operating in the land and construction sectors. BioCarbon Engineering, on the other hand, uses drones to help benefit the environment. Drones are used to help survey areas, identifying the type and condition of the local ecosystem, and are also used as an aerial and less labour intensive alternative to traditional replanting efforts.

Drone Software

Incorporated in 2014,  SLAMcore has already raised nearly £5m in funding, and company filings indicate the company has been valued at around £10m. They market their product as “spatial intelligence software”, developing algorithms to improve how autonomous drones (and robots) understand and interact with the space around them. So it is first and foremost an AI startup, and is helping to design the software that enables drones to move by themselves, without a remote pilot.

Similarly, and of particular use after the Gatwick drone incident at the end of last year, Altitude Angels develops software that fits into a drone’s operating system, preventing them from entering no-fly zones, or “geofenced” areas. This helps commercial and private drone users from breaking local laws.

New Drone Hardware

Animal Dynamics is a spinout from the University of Oxford’s Zoology Department. Incorporated in 2015, the company was founded on the research of Adrian Thomas, Professor of Biomechanics at Oxford. Through this, the company hopes to transfer mechanical designs from animals into artificial machinery, such as drones or other propulsion systems. They currently have three designs under prototype, going by the names of Skeeter, Stork and Malolo.

Their most developed idea, an unmanned aerial system (AKA a drone) based on the flight mechanism of a dragonfly, has been undertaken in collaboration with the Ministry of Defence. This project started in 2015, and could well have been what spurred their commercialisation with the support of Oxford University Innovation. In 2016 the Government released a large lump sum of R&D funding to develop “futuristic technologies”, some of which reportedly went to Animal Dynamics.

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