Elevator Pitch
Skydio is a Series D startup leading the development of autonomous drones. The company uses artificial intelligence and computer vision to create intelligent aerial vehicles that can be used by consumers, enterprises, and governments. Currently, Skydio is being used to inspect critical infrastructure to eliminate the need for expensive equipment and dangerous worker exposure; to gain awareness in critical situations that require public safety operators; and to perform short-range reconnaissance flights in defense units.
Founding
Skydio was founded in 2014 by Abraham Bachrach, Adam Bry, and Matt Donahoe. All three co-founders initially met as graduate students at MIT where they began designing autonomous drones together— the first step to founding Skydio ten years later. Bachrach and Bry went on to work together on Google’s Project Wing, developing a delivery system using self-flying vehicles. Here, they were able to gain important technical expertise ranging from algorithm planning to software architecture. After a few years at Google, they teamed up to start Skydio in Redwood City, California where they still have their headquarters and base all of their manufacturing: Skydio prides itself on being US based and handles all production in California. Today, with Bry as CEO and Bachrach as CTO, Skydio’s mission is to make the world more productive, creative, and safe with autonomous flight.
So far, Skydio has raised $340 million total in funding and raised a $170 million Series D led by Andreessen Horowitz Growth fund on February 28, 2021, with a $1 billion total valuation. Previously they raised a $100 million Series C round in July 2020, a $42 million Series B in 2018, and a $25 million Series A in 2016 after being founded in 2014. They boast investors such as Andreesen Horowitz, Levitate Capital, Next47, IVP, Playground, and NVIDIA, and plan on using their new funding to expand globally and accelerate product development.
Disrupting the Industry
Drones have evolved drastically from their beginning as remote controlled toys and have since been adopted in a myriad of industries and applications. Whether it’s delivering medical supplies to hard to reach areas, taking expansive aerial photos, or running geological surveillance, the aerial range and versatility of drones presents limitless possibilities. However, as adopters continue to explore these opportunities**,** they find themselves running into challenges.
Skydio boils it down to two problems. First, traditional, manually operated drones often require highly trained pilots due to the high risk of crashing; as a result, pilots actively avoid proximity to their targets. Second, in an effort to compensate, vendors build and sell large cameras and zoom lenses which needlessly hikes up the price of each unit.
Unfortunately, these two problems have hindered the industry from moving forward and ultimately demonstrate the limitations of manually operated drones. As a result, the promise of fully autonomous drones has proven to be the next frontier for not only Skydio, but the drone industry as a whole.
While most drones have some level of automation using a combination of sensors, GPS receivers, and accelerometers, drones are still largely operated manually and do not express decision making capabilities. However, Skydio is one of the first companies to deliver a new level of AI-powered autonomy that gives drones the ability to fully view their surroundings, map what is around them, predict how objects operate in space, and use this information to provide simple, safe flight experiences. Coined “Skydio Autonomy", the AI powered engine brings “the skills of an expert pilot to [their] drones”.
Product
In 2018, Skydio released the Skydio R1. Despite the high price point of $2,499 and a narrower set of features (mainly just the ability to follow and film), it was an important test of Skydio’s software and a huge first step towards laying the groundwork for the company's newest product launch: Skydio 2.
The Skydio 2, priced at $999, runs using the aforementioned Skydio Autonomy Engine which has “360° obstacle avoidance, real-time 3D mapping, object and scene recognition, motion planning and 360 Superzoom”. It can categorize autonomous tracking between people and cars with speeds up to 36 mph and is designed to deliver more seamless cinematic capture.
Essentially, the Skydio Autonomy Engine perceives what is happening around Skydio 2, predicts what will happen next, and makes multiple intelligent decisions every second. Using six 4K cameras to build a 3D map of its surroundings (including trees, people, buildings and more), the drone can understand the user's goal, what obstacles to avoid, and what will happen next. As Skydio describes it, “Skydio 2 is essentially like having your own flying camera crew”.
Skydio Among Others
Skydio’s major competitor is DJI Innovations, which currently dominates the consumer and commercial drone markets. While Skydio’s technology alone sets the company apart within the industry because of its intelligent, fully autonomous system, concerns about drone technology and security have become a large factor influencing the competitive landscape. As the company touts its domestic supply chain in the US as a key strategic advantage, Skydio is an example of how conflicts between the US and China over technology can forge unexpected openings for American companies. CEO Bry said in an interview, “In a lot of places, I think there’s concern about being dependent on Chinese products made by a company that’s beholden to China’s IT policy [a 2017 law that requires companies to hand over data to officials].”
It’s important to note that despite security concerns, DJI Innovations does make undeniably good, capable drones in comparison to others on the market; in fact, when the US Department of the Interior grounded its entire fleet of 810 drones, the Department of Agriculture and the Office of Management and Budget both argued that there were no viable alternatives to DJI drones. However, here are some of the other US-based competitors you may want to know about, either because they are already mentioned often - or they’re relatively unknown and are on the come up.
Skyfish is an American drone manufacturer that recently launched two brand-new autonomous drones, the Skyfish M4 and Skyfish M6, along with a ruggedized remote controller. Its autonomous technology is not as advanced or comprehensive as Skydio’s, but has generated buzz over its unique partnership with Sony; Skyfish drones can fully integrate with the Sony Alpha series of cameras which have become hugely popular filmmaking tools, in large part due to the company's excellent sensors. The Skyfish M4 is geared toward photogrammetry and detailed infrastructure inspection through 3-D reality models, while the Skyfish M6 is designed for lifting heavier payloads, and is capable of carrying up to 12 pounds.
TerraView is another company that is notable in that its RangePro X8P – Pixhawk was designed to meet federal government and Department of Defense guidelines. Additionally, the company actively claims that all of its products are “proudly engineered and manufactured in the USA.” The RangePro X8P can work across a variety of industries such as energy, agriculture, construction, first responders, mining, and government. Flight endurance is also one of the RangePro Pixhawk’s differentiators as each battery can support over 500 charging cycles, giving customers significant value.
One thing that may be on your mind right now is the hot topic of drone delivery and where Skydio fits in to that. On the one hand there’s Wing, a division of Alphabet that launched in 2012 and offers a small drone paired with the OpenSky navigation system for package delivery. Wing has conducted more than 100,000 flights across three continents and has partnered with FedEx and Walgreens, as well as local businesses. Prime Air, which will deliver packages up to 5 pounds in 30 minutes or less using small drones, is also a major player in the space. Amazon has been developing and testing the system through Prime Air development centers in the U.S., the U.K., Austria, France, and Israel. Other companies worth paying attention to that are spearheading drone delivery include Flytrex, UPS Flight Forward, DHL Parcelcopter, and Boeing. In contrast to these companies, Skydio is looking at opportunities in massive multi-billion dollar industries that consumers don't interact with that involve inspection, data capture, security, monitoring of site areas, and critical infrastructure. “That’s where drones are going to be—and already are—deployed widely”. Adam Bry says, “Delivery gets a disproportionate amount of mindshare for the average person, because we all receive packages so frequently”.
On the Scene
Just within the past year, Skydio has made significant progress in a myriad of markets. While widespread adoption by consumers continues to grow, Skydio 2 also made the largest ever enterprise drone deal with EagleView for autonomous residential roof inspection. Together, they will have the ability to combine EagleView’s AI-based analysis and GIS solutions with Skydio’s high-resolution, precision imaging to provide roofing status information to insurance companies and claims adjustments for companies and government agencies.
Along with these larger deals, Skydio has been the drone of choice in a number of deployments including construction, departments of transportation, energy utilities, and police departments. Leading establishments and public sector organizations, such as the US Civil Air Patrol, Boston Police Department, Sacramento Metro Fire Department, Jacobs Engineering, and Sundt Construction rely on Skydio autonomous drones for public safety, inspection, defense and many more use cases.
The Future
Skydio has big plans for their future. CEO Adam Bry has said that the company has seen “organic pull” from customers across various industries, including government departments, engineering firms, and construction companies. In addition, the US Army has chosen Skydio to join a prototyping phase to determine whether the company will supply the first fleet of short-range reconnaissance unmanned aerial vehicles. The prototype evaluation is set to occur in early April and if successful, the Army will request approval to enter production for the first tranche of systems with Skydio. In a statement in early February, Bry said “We are proud to have been selected by the US Army for the final integration in the SRR program. The Army has done incredible work to ensure our soldiers have access to cutting edge drone technology. This milestone is the result of years of research and development in autonomous flight and core technologies. It is a testament to the breakthrough capabilities of the Skydio X2D and our world-class team.” Because Skydio’s main clients at this stage are still government entities, this may not have a huge impact on their consumer sales. In addition, Skydio has been strict about only using their drones for emergency response, surveillance, and reconnaissance missions and has claimed that they don’t have any plans to weaponize their technology.
Skydio’s work with the Army allows for more growth with the company. Because of espionage fears, the US Armed Forces grounded Chinese drones, which opens up opportunities for American drone companies. DJI, the leading Chinese drone company, currently accounts for 70% of consumer drone sales; however, now that the company can’t sell to American government clients, there is a market opportunity for Skydio to step into the gap.
Skydio is undergoing rapid growth and has many new products coming out this year. With their sights set on becoming the leading drone manufacturer, the company has a lot of ambition and has been living up the hype so far. It won’t be surprising if they continue to create new partnerships and bring their drones into the mainstream market to help shape a world where autonomous aerial vehicles are the norm.