Despite being more than a decade since drones hit mainstream through action cameras and casual aerial photography, drones or unmanned aerial vehicles are still regarded as a novelty or an emerging category within the deeptech industry in the Indian context. According to Inc42 DataLabs, India has more than 50 drone startups operating currently, but there’s a lot of room for growth and innovation in this category. Despite some drone startups being present in the Indian market for over a decade, there has been very little impact from this sector on the overall industry.
Innovation and funding often go hand-in-hand and with one lacking, the other dries up. Arguably, India’s drone sector has been caught in this vicious cycle. While one of the major reasons for the lack of innovation is the lack of investment, it is also the other way around at the same time. As is evident in the Inc42 DataLabs’ “Drone Technology: India Opportunity Report 2019”, the total funding raised by drone startups in India from 2014 to 2018 was just $16.56 Mn which accounts for a mere 2.26% of the total deeptech funding ($732 Mn) in this period.
This market reality has made survival a priority for drone startups, and despite the constant need to balance your business runway and your innovation roadmap, some drone startups have still managed to capture the limelight in the investment-shy Indian market.
Related Article: Is Sky The ‘Only’ Limit For Drone Startups In India?
Drone Startups Turn B2B In India
There’s no doubt that India has a massive opportunity for drone startups. Despite the substantial demand for drones in civilian and military applications, Indian drone manufacturers aren’t the first choice for customers – governments, other businesses or end users – when it comes to purchasing orders.
The primary reason behind this is the prevalence of low-cost drones made in China, available on offline and online channels. Invariably, these affordable drones are also more advanced in terms of technology in comparison to Indian drones. This can be attributed to the higher investments in drone sector in China. From 2014 to 2018, the total funding in drone startups in China was $239 Mn, which is 14x higher than the investment in India ($16.56 Mn). This is naturally reflected in the higher R&D budget at these startups in comparison to India.
While the consumer market has shown a lukewarm response to Indian drones, drone startups have managed to hold ground in the B2B segment.
For example, TechEagle, an Indian drone manufacturer was acquired by Zomato last year. Other drone startups like ideaForge, AUS, Redwing Aerospace Laboratories etc.are also primarily developing solutions for the B2B model.
Out of all the Indian drone startups which got funded from 2014 to 2018 six startups with $16.56 Mn in funding totally, are involved in providing B2B solutions within industries such as agriculture, defence, construction, civilian and government surveillance, and last mile cargo delivery.
While one can say that the Indian B2C market for drones is far from a success, the investor confidence towards the B2B application of drones in India is a positive sign for the industry as a whole. Even though funding for B2B drone startups is skewed, it’s important for the market as a whole, and could have a trickle-down effect on B2C drone startups. As more and more businesses adopt Indian drones with the hope that the government’s revamped drone policy addresses scaled-up operations, India’s drones sector is likely to get more market clarity and reach its full potential, just as it has done in other markets.DOWNLOAD THE FREE REPORT