Africa might not be there yet when it comes to the design and manufacturing side of things; but it will always take some of the credit for providing a good testing ground for the introduction of delivery drone services across the world.

Drone logistics start-ups that got their wings in Africa, which include drone Zipline and Wingcopter; are now scoring lucrative deals back in their countries of origin, following their sojourns in Africa that proved that drone logistics is indeed a scalable investment that can bring positive returns to investors.

Now, as the below article from venture capital company Linqto explains, there seems to be a scramble for investment into delivery drones, which we hope can only be a good thing; pending legal and regulatory approvals in various countries of course.

We are hoping there will be a time in the near future when investors can commit to back African projects that encourage the design and manufacture of drones on the continent. We have had the schools, like the African Drone and Data Academy in Malawi, and we also have the visionaries; who include Aziz Kountche, who has been developing small drones for various applications in his native home, Niger.

In this vein, the work done by WeRobotics in trying to promote African-led innovation in drone and robotics technology should also be applauded. The non-profit organisation may not be a venture capital company in its own right, but what it does in setting up Flying Labs across the global south, and connecting young drone and robotics entrepreneurs with experts from all over the world to inspire leadership and innovation is remarkable.

For now though, you can learn more about developments in as far as worldwide investment in delivery, cargo and other drone ventures drones is concerned.

Institutional investors who have continued to grapple with a struggling global supply chain crisis are beginning to target companies that aim to alleviate commerce woes, chiefly among these investments are drone start-ups.

As of early this year, McKinsey estimated that more than 2,000 drone deliveries are occurring each day worldwide. They also project that the industry as a whole will be close to 1.5 million total deliveries by the end of this year. These statistics come without regulatory approval, however, leveraging exemptions for very specific applications and use cases are in existence.

Today, drone-deliveries cover a broad range of goods: from vaccines, to groceries, to blood transfusions. Amazon, Google and Domino’s Pizza have all pulled off carefully controlled demonstrations and pilot programs delivering goods.

The total amount of venture capital (VC) money flowing into drone start-ups is up in the air, but multiple databases have reported that the deal value is in the billions of dollars.

According to Forbes, VCs have poured $5billion into drone start-ups, through nearly 130 different companies spanning the globe over the past two years. However, $4.6billion of this funding has been funnelled to just six companies in the U.S. and Europe: Joby Aviation, Lilium, Paragon, Archer Aviation, Beta Technologies, and Volocopter.

In the last five years, the largest VC-led round in the drone sector appears to be a $1billion investment in China’s SZ DJI Technology Company (the world leading drone manufacturer which, as of now, makes every other civilian drone – except delivery drones). The round was led by the Shanghai Free Trade Zone Equity Fund, Mirae Asset Daewoo, Fong Capital Partners, BMY Group, and other investors according to PitchBook.

In 2020 alone, VCs made 164 investments into drone start-ups, totalling $2.34 billion, according to India-based Drone marketplace TropoGo. India has been a haven for both drone start-ups, TropoGo estimates that the global drone market will reach $125 billion by 2025, over $11 billion of which will be centred in India.

Other notable past deals include the $443.7 million buyout of Russian drone company VR Technologies by Abu Dhabi-based private equity firm Tawazun Economic Council in 2019; and the $375 million takeover of Fairfax, Virginia-based MAG Aerospace, a provider of manned and unmanned intelligence and surveillance, by New Mountain Capital, according to PitchBook.

Governments have jumped into the pool of drone-backers, too. In 2020, the United States Air Force provided a $950 million grant to Edgybees, a Gaithersburg, Md.-based VC-backed company that provides first-response applications for drones and self-driving vehicles.

In terms of drone delivery systems, there are a couple of major players in the U.S. There is of course e-commerce behemoth Amazon, which has been experimenting with drone delivery for years. Aerospace and defence firms Boeing and Airbus are also active in the field.

Further, there’s Zipline, a Linqto portfolio company, that designs, manufactures, and operates drones to deliver vital medical products through operations in Africa, Asia, and North America.

To date the company has secured its US Federal Aviation Certifications, and has flown over 30 million miles, made over 432,000 commercial deliveries, and delivered more than 4M products. In addition to NASA, Zipline’s partners include Pfizer, Walmart, Toyota, Jumia, and the company has various government contracts globally. Zipline currently services healthcare, retail, and many other global markets.

As consumers continue to rely on e-commerce companies, and with global supply chain issues remaining constant, there’s reason to believe that VC involvement in the drone industry will continue to grow.

Daniel Shaposhnikov, a partner at Phystech Ventures, told Forbes he believes we’ll see a large-scale deployment of drones for cargo delivery within the next five years.

Shaposhnikov also said he expects heavy-payload drones to replace helicopters within the next six-ten years, principally because they are “up to ten times cheaper.”