Drone manufacturer Skydio secures $170 mln in extension round

Skydio, the American drone manufacturer, has raised $170 million in an extension of its Series E funding round, which initially brought in $230 million in early 2023. 

The new funding attracted investors like Japanese telecom operator KDDI and Axon, renowned for its police technologies such as the taser. Linse Capital, a stakeholder owning more than 21% of Skydio, also participated. KDDI contributed approximately $60 million, aiming to deploy Skydio drones at 1,000 locations across Japan while improving their LTE connectivity.

According to a recent report by Techcrunch, Skydio generated over $100 million in annual revenue in 2023, with 30% of it derived from software. The company's gross margin of 38.1% was possible by a shift toward software sales and improved production efficiencies. 

Following the discontinuation of its consumer drone line in 2023, Skydio has gained traction with enterprise, public safety, and military clients. The company's revenue for 2024 is projected to reach $180 million, with defence orders making up over half of its $1.2 billion pipeline, as per Techcrunch.

Skydio's funding comes amid a surge in defence technology investment, with over $9.1 billion invested in the sector during the first half of 2024, according to PitchBook, a private market data provider. 

Skydio's drones are increasingly used by law enforcement agencies, a growth area supported by investors like Andreessen Horowitz, a private venture capital firm. Techcrunch reported that Andreessen Horowitz partner Ben Horowitz, an investor in Skydio, donated money to help the Las Vegas Police Department purchase Skydio drones. This move of bypassing traditional procurement processes, has drawn scrutiny from advocacy groups.