Commercial drones will soon populate U.S. airspace, and venture capitalists like Tim Draper are placing their bets.
Draper, an early investor in Hotmail, Skype and Baidu, is now backing DroneDeploy, a startup that's building software to direct unmanned aircraft on land mapping and the surveillance of agricultural fields. Draper even expects drones to one day bring him dinner.
"Drones hold the promise of companies anticipating our every need and delivering without human involvement," Draper, 55, wrote in an e-mail. "Everything from pizza delivery to personal shopping can be handled by drones."
Venture investors in the U.S. poured $40.9 million into drone-related startups in the first nine months of this year, more than double the amount for all of 2012, according to data provided to Bloomberg News by PricewaterhouseCoopers and the National Venture Capital Association. Drones are moving from the military, where they've been used to spy on and kill suspected terrorists, to a range of civilian activities.
Congress has directed the Federal Aviation Administration to develop a plan to integrate drones into U.S. airspace by 2015 and to move faster on standards for drones weighing less than 55 pounds.
It's not just startups that are anticipating the changes. ConocoPhillips says that drones could be used to monitor ice floes and marine mammals in the Arctic. Entrants could also include established drone makers AeroVironment Inc., Boeing Co.'s Insitu unit and Israel Aerospace Industries Ltd. in Tel Aviv, according to Bloomberg Government.
Sales of civilian unmanned aerial vehicles, or UAVs, will reach $8.2 billion within the decade, up from nothing today, according to Phil Finnegan, director of corporate analysis at researcher Teal Group, which tracks aerospace and defense.
"There's going to be a lot of growth in this market," Finnegan said.
While the capital invested in drone-related startups has surged, it's still concentrated in just a few companies. Three startups account for all of the money raised in the first nine months of this year, compared with five in all of 2012.