What does the latest year of drone news reveal about the commercial drone industry? As we do every year, we want to recap the events that happened and draw lessons about how the industry developed throughout the year and where it may be heading. After the tumultuous year that was 2020, drone companies throughout the world in 2021 expressed a more positive experience and outlook for the future. So let’s recap the year of drone news and draw the best lessons for 2022 and the coming years.
Originally published: January 2022
The beginning of the year (January, February and March) brought us some big drone news about major investments, which hinted at the year that would come. First there was an announcement in January that Wingcopter raised US$22M in Series A funding to expand operations and testing. And then in February it was reported that Terra Drone would receive US$14.4M in Series A Funding. More financial news came when there was a scandal about eHang stocks after a short-seller wrote a negative piece on the company (though the company certainly seems to have put the entire ordeal behind them).
Perhaps most-famously among headlines were astonishing drone videos. In March, a single-shot video of a drone flying through a bowling alley went viral and received praise from Hollywood, and less than two weeks later several international outlets showed footage of a drone flying through an erupting volcano in Iceland. Other major drone news included the FAA’s first approval of fully-automated commercial drone flights as well as releasing the Remote ID Rules that will have a very influential impact on the industry.
All of these drone headlines made for an incredibly exciting start to 2021, and yet there was certainly much more to come.
Once the second quarter of 2021 began, it was time for drone delivery to take the center stage. Drone deliveries ramped up with Wing (delivering girl scout cookies in the US), Wingcopter (with their triple-drop delivery model), and Manna (with a US$25M investment), all of which were reported in April. May followed up with BVLOS autonomous deliveries of COVID tests and protective equipment (PPE) in the UK, as well as other delivery drone news from other parts of the globe. In Botswana, the United Nations partnered up with local government and universities to deliver blood, while in Uganda drones started being used to deliver antiretroviral drugs (ARVs). Other companies such as Draganfly, Volansi, and Flytrex prepared for delivery of coronavirus vaccines in Texas and California and received FAA approval to fly over people in North Carolina. Meanwhile, in Ohio, grocery store Kroger partnered with Drone Express to launch their first autonomous grocery delivery.
Another important drone headline from June was DJI being cleared from any security concerns by the US Department of Defense. Though their market share had not been largely affected by the controversy, this was nevertheless encouraging news for the industry. The positive outlook for the industry as a whole was also reflected in our Drone Industry Barometer, published late in summer. The Barometer showed a lower negative impact of COVID-19, more increase in demand, and higher expectations for the coming year.
As the summer continued, so did the news about drone delivery. In July, Zipline pharmaceuticals was valuated at US$2.75B after receiving US$250M in additional funding. However, the more shocking news for drone delivery came in August. First it was reported that Amazon Prime Air in the UK was struggling and would scale down, and shortly afterwards DHL announced that it would be discontinuing its well-known Parcelcopter project. Yet it is also worth noting that this did not mean that Amazon Prime Air as a whole would be shut down, while the Parcelcopter was always intended as more of a proof of concept. Further encouragement about the future of drone delivery arrived soon afterwards when Wing reached a milestone 100,000 deliveries since inception.
And August and September also saw the rising hype of another sector of the drone industry: passenger drones. After months of preparation since their SPAC agreements, the passenger drone stocks by Joby, Lilium and Archer began being publicly traded. In the same way that drone delivery hype has risen and fallen until it has reached a realistic level of expectations, we can expect passenger drones to experience the same in the coming years. And this is likely to be reflected in both stock markets, drone news and overall popular sentiment.
Towards the end of 2021, headlines for drone news have continued on the same vein as the rest of the year: drone delivery. It was reported that Wing started testing deliveries from a mall in Australia as well as expanding operations to Dallas-Fort Worth. Meanwhile Flytrex received a US$40M Series C funding for drone delivery, and Walmart announced testing drone deliveries through DroneUp in Arkansas and through Zipline in Utah. In other words, drone delivery continued on center stage, and this was also reflected by the first ever lung delivery by drone in Ontario, Canada.
Lastly, in November, the JEDA Association (Joint European Drone Associations) was announced, which will promote drone activities throughout Europe with one united voice. Other end-of-year headlines included substantial funding for counter-drone companies such as Dedrone (US$30.5M) and SkySafe (US$30M). As drone activity increases, so does the need for these products in order to adequately protect critical infrastructure.
Needless to say, there was a lot of public attention and financial investment into drone deliveries. This was no fluke since the Cargo, Courier, Intralogistics and Warehousing will be among the fastest-growing drone industry verticals with a CAGR of 24.3%, as projected by our Drone Market Report 2021. One reason for this growth is the number of companies who engage in either business-internal services or provide drone services to other companies.
Finally, as a concluding lesson for 2021, there’s the role of expectations. The news about DHL’s Parcelcopter and Amazon Prime Air, when analyzed in the context of all the investments towards Zipline and Flytrex (among others), suggest that companies are now more aware of both the potential and the limitations of drone delivery. In other words, expectations have become more realistic, and less influenced by hype. This is an important lesson for the entire drone industry and particularly for passenger drones, which are still largely affected by hype that can be positive (e.g Joby, Lilium, Archer going public) and negative (e.g. eHang’s short-seller issue). The success of drone applications has been achieved through delivering quality results while constantly managing expectations, so for 2022 and the years ahead, it is imperative to develop a drone business model based on concrete data and objective analysis.
Some of the key things to keep an eye out for in 2022 include: regulation, more proofs of concept, and industry prices. Regarding regulation, a regulatory framework draft for BVLOS recommendations was expected from the BVLOS Aviation Rulemaking Committee (ARC) by the end of 2021 and should be publishing very soon. Additionally, given all of the recent success by drone delivery, expect more proofs of concept for deliveries from various players throughout the industry.
Lastly, expect more adoption of drones throughout various industries as ease-of-use increases and complexity to operate drones decreases. It is true that complex operations will remain in the hands of experienced drone operator companies (since a lot of paperwork and training has already been done), however simpler missions will be in-sourced by companies and the decreasing overall price of drones will also lead to a higher demand.
Ed Alvarado holds a Master’s in International Relations, Bachelor’s in Economics & Philosophy, and has lived in 7 countries.