We break down the mixed outlook for drone delivery companies as investment soars for some while others face technical hurdles and cost-cutting measures.
Drone delivery companies — which use unmanned aerial vehicles to efficiently deliver products — have had a rocky takeoff.
DroneUp, a leader in the drone delivery space, announced company layoffs last week. While the company attributes the cuts to its strategic shift toward the consumer market (and away from other services like mapping, photography, and surveying), it still signals some of the industry’s growing pains.
On the one hand, numerous startups have established major commercial partnerships — DroneUp, Zipline, and Flytrex have all inked deals with Walmart, for one — and a handful of players have recently secured significant funding.
However, the sector continues to face technical hurdles like crashes and safety concerns. Even Amazon‘s Prime Air program has struggled with delays and, most recently, extensive layoffs.
In this brief, we use CB Insights data to assess the current state of the drone delivery market. We look at the following data points:
- Total funding
- Valuations
- Execution, Strength, and Positioning (ESP) matrix
- Company headcount
Total funding
Despite DroneUp’s layoffs, several drone delivery startups have attracted substantial funding in recent months, demonstrating investor interest in the space’s potential to disrupt the logistics sector.
Companies have raised $352M in 2023 so far — almost 7x last year’s $52M — driven by Zipline’s $330M Series F round in April. Zipline has raised $817M in total.
In February, Garuda Aerospace raised a $22M Series A round, bringing its total funding to $58M.
DroneUp, meanwhile, has raised just $5M in equity funding to date.
Valuations
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