Trying to pick a winning investment in this nascent sector has so far proven elusive.
Manufacturing of consumer products typically draws an array of enterprises, both small and large. It’s a bit different for consumer drones, though. There are inherent entry barriers, which is one reason why 99% of drone companies are simply into assembly. It has been a different story for drone companies with a strong technological base. They’ve found themselves as some of the most-sought-after investment targets, favored by venture capitalists, private equity firms and all sorts of older, larger companies looking to make an investment in “future” technology.
Since 2014, reports of drone manufacturers seeking A/B/C rounds of venture capital financing have been commonplace.
The most sought-after manufacturers — Zano, 3DR, Zero Tech, Ehang and even Yuneec, which received a capital injection from Intel — have had fairly splashy launches of their new products and broad coverage in print media and via video.
As an investment, though, these companies have been a mixed bag in terms of results.
• Zano – Near-Failure to Launch
• 3DR: An experiment with open source code
• Who’s on First? Rift among Rapoo, Beijing ZEROTECH and Shenzhen Zero
• Intel and Yuneec are friendly to each other in name only. During CES 2016, Yuneec demonstrated the obstacle avoidance and tracking capabilities of the Typhoon H, garnering a large amount of coverage and attention. Intel acknowledged that, on top of its RealSense module, it also utilized a much more-expensive Vicon system to perform its demo.
The Typhoon H recently started to ship to consumers, around five months after CES, but without RealSense and with obstacle avoidance limited to two onboard ultrasonic sensors that work out to about five feet. RealSense is due to come out for the Typhoon H later this year as an add-on.
It’s critical for Intel to get RealSense technology right with the Typhoon H. If it works right, that could give Intel the technological foothold it covets in the consumer drone sector.
• DJI has never had a problem with is attracting investment. It’s an IP center, with over 500 patents globally, and appears more focused on outpacing and raising the bar on competitors through massive R&D efforts. It is intriguing because it is both the industry bellwether and a barometer for consumer-sector saturation in some markets.
I found this article to offer some hard to find behind the scenes insights. The section on DJI alone is worth reading. This is the first discussion of consumer saturation I have found – had to happen.