Home / Companies / Start-ups /  Drone startups secure record funding despite slow takeoff

Bengaluru/New Delhi: India’s drone industry saw a bumper year in terms of fundraising in 2022, lifted by favourable government policies, increasing use cases, and the first public listing of a company from the sector. Still, adoption of drones remains low in the country, thanks in part to steep costs of equipment and training.

According to data from researcher Tracxn, homegrown drone startups raised $39.1 million of equity funding in 2022, more than double compared to $17.5 million in 2021. To be sure, growth was high in 2021 as well at 90%, but that was from a smaller base of $9.2 million in 2020. The number of funding rounds remained almost flat at 21 in 2022 against 23 in 2021, but higher than 11 in 2020. In comparison, global funding in the drone sector grew to $3 billion in 2022, a marginal rise of 7.1% from $2.8 billion in 2021. A year earlier, the growth in funding was more than double from $1.1 billion in 2020.

The Indian government has made a concerted attempt to encourage the drone industry, and introduced a dedicated drone policy last year with emphasis on local manufacturing, and encouragement for drones-as-a-service in critical sectors like farming, healthcare, logistics, defence and e-commerce. In February 2022, finance minister Nirmala Sitharaman also announced Drone Shakti, a mission to make the country a drone hub by 2030.

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Late last year, Droneacharya Aerial Innovations became the first Indian drone company to go public. The startup is engaged in drone pilot training for mining, agriculture, oil and gas and other sectors. Following an initial public offering in which it raised 34 crore, the company’s shares listed at a premium of 90% on debut, and have been rising ever since.

According to the federal policy think tank NITI Aayog, India’s UAV (unmanned aerial vehicle) market is set to expand to $50 billion over the next 15 years as drones are projected to substitute 80% of operations currently carried out by manned aircraft.

Drone startups are making a push for increasing adoption. On 6 December, Chennai-based homegrown drone manufacturing and operations startup, Garuda Aerospace, unveiled the first of its 1,000 planned drone centres of excellence (CoE) for drone skilling across India. In an interview, Agnishwar Jayaprakash, chief executive officer, said Garuda Aerospace will set up these centres within the next three months, and train 100,000 drone pilots next year.For the moment, the industry remains at a nascent stage, despite holding the potential for significant growth in the future. For instance, Dharna Nar, who earned a certification as a drone pilot earlier this year from a Remote Pilot Training Organization (RTPO), said despite spending 65,000 for a five-day course, she has had to diversify her career beyond being a drone operator.

Nar, who runs an enthusiast drone training institute called Drone School India, said the cost of drones, and lack of available commercial drone projects are among the chief reasons for the lack of jobs.“While there are employment opportunities for drone operators right now, most such roles are not full-time, and are very infrequent and occasional in nature," she said.

Karan Kamdar, CEO of Mumbai-based drone manufacturer 1 Martian Way and president of India Drone Racing League, said homegrown drones could be as much as four times more expensive than international standard drones such as those built by Chinese drone maker DJI.

He added that since only homegrown drones, with a Unique Identification Number (UIN) are allowed in India, the cost of Indian-made drones could impact adoption.

Akshay Singhal, partner, technology at EY, estimated that India should take “another 18 months" for widespread adoption of drones.

The drone and its components industry can significantly strengthen India’s manufacturing potential to $23 billion approximately by 2030, according to a recent EY-FICCI report titled, “Making India the drone hub of the world".Additionally, strong action plans are needed to create a robust demand, boost manufacturing, attract investments and facilitate exports to make India the drone hub of the world by 2030, offering the most competitive and innovative manufacturing capabilities, the report added.


Beena Parmar
Been Parmar is a financial journalist based in Mumbai. She has reported on the banking and finance sector for over 10 years. She now writes on the alternative investment ecosystem from India - private equity, venture capital and especially startups. She loves to read about politics, society and humane stories.
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