State of drone investment in 2023

One of the big reasons why we love to present reports from research company, Drone Industry Insights as they are is that they always give us a sober analysis of where our beloved continent is in as far as everything drone technology is concerned.

Take their latest database for drone investments across the world for example – for all the capital that flowed into drone technology in the past year, only two percent made its way into Africa.

It was two percent in 2021.

Of course, it is not as worse as South America, which according to infographic that DII presented, only saw a mere 0.2 percent of investment trickling in for the whole of 2022 – but a combined only five percent of drone technology investment into Africa, South America and Australia – against 95 percent in Asia, Europe and North America – is truly heart breaking.

It means talent, employment opportunities and human resources that continue to be lost and Africa staying at the bottom of the civilian drone value chain as consumers.

That is why we do not take for granted the hard yards being covered by WeRobotics and its Flying Labs franchises across the global south in promoting and inspiring local young entrepreneurs to take a chance on drone and robotics technology.

We also understand that there is a lot of chips that have to fall the right way… but still.

Five percent against 95 percent.

That is a bit much.

DII’s full report is below.

Over the past few years, we reported that drone industry investments have been progressively reaching new heights and breaking records.

However, the year 2022 finally saw an end to the exponential growth, and the total value of investments decreased by 39 percent compared to the previous year.

Nevertheless, the investments going into the global drone industry still reached over US$4.8 billion.

This means that the decrease in growth does not mean that there was a shrinkage or loss of drone industry investment in any way.

As complement to our latest Drone Industry Investment Database, here is a glimpse into the latest data about the drone industry and its investments.

Snapshot of Drone Industry Investments

According to our research, we registered 179 investment deals in the drone industry in 2022, which amounted to US $4.8 billion.

A closer look at the timing of these drone industry investments shows that the total number of investments started to decrease in May 2022. This was a couple months after the Russian invasion of Ukraine and the reporting of small recreational and commercial drones being used in warfare.

After several months, the numbers picked back up in November, when total drone industry investments reached their maximum level. Interestingly, both the decrease in May and the increase in November came after major headlines regarding DJI (in April and October), but to show any sort of causal relationship between these events would require a more in-depth study.

Meanwhile, Mergers and Acquisitions (M&A) also saw a slight decrease in 2022, with 40 deals compared to the previous year’s 47 deals. This decrease is rather insignificant, especially in comparison to the number of partnerships that grew massively, with 270 deals in 2022 vs the 193 deals in 2021.

The majority of these partnerships (74 percent) were between drone companies and non-drone companies, which once again is a strong sign of how drone technology can support work activities and operations in many other industries.

In other words, the drone world isn’t a closed ecosystem of drone companies working only with each other, but rather a multi-industry of companies working to achieve their goals more efficiently.

Drone Industry Investment Trends by Region and Company Type

In terms of regions that attracted the most investment, North America was once again at the top, but it was much less dominant than in previous years. In 2021, North America represented 64 percent of the total investment value going into drones, while in 2022 this figure was a much lower 51 percent.

Meanwhile, the number two and three regions swapped places from the previous year: Asia rose from 14 percent of investments in 2021 to 27 percent in 2022 and overtook Europe, which fell from 20 percent to 17 percent in 2022.

All things considered, the top three regions continue to dominate drone industry investments by taking up 95 percent of all investment value.

Regarding the company type, there were also similar patterns. Much like in previous years, a significant percentage of the total investment was allocated to hardware drone companies, which accounted for 84 percent of the total investment. However, this year, software drone companies received US$534 million, which was more than double the investments received by drone service companies (US$210 million).

Investment Types and AAM Industry Investments

Regarding the deal type, 37 percent of investments in 2022 were in the early stage of venture capital. This year, companies received more bank credit, resulting in a 24 percent increase in the “Debt” deal type.

However, there were not many IPO/PIPEs this year compared to the previous year, where a lot of eVTOL (electric Vertical Takeoff and Landing) companies entered stock markets through these deals. And this leads us precisely to one particular growing sector of the drone industry.

Taking a closer look at the Advanced Air Mobility (AAM) investments, eVTOL hardware companies received considerably higher investments (US$3.1 billion) compared to two other AAM categories in 2022. These other two trailing categories are Cargo Hardware (US$52 million) and Delivery Service companies (US$67 million).

From an individual funder perspective, the US remains the leading nation and accounts for the most investors in 2022 (~40%). However, the overwhelming status is slightly declining, while countries from Northern Europe, the Middle East and especially India (10%) could increase.

The Drone Industry Insights’ full report is available for purchase here.


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