Inside Unmanned Systems

DEC 2018 - JAN 2019

Inside Unmanned Systems provides actionable business intelligence to decision-makers and influencers operating within the global UAS community. Features include analysis of key technologies, policy/regulatory developments and new product design.

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44  December 2018/January 2019 unmanned systems inside AIR MARKET FORECAST The market for commercial drones is expanding faster than earlier predicted and is drawing record-breaking levels of investment from venture capitalist s. by Dee Ann Divis Photo courtesy of Teal Group. Investors Chase UAS Market V enture capitalists are set to break their 2017 record for investment in drone firms this year , attracted by faster than anticipated growth in the civil/commercial market for unmanned aircraft systems (UAS), according to a recent forecast by the Teal Group. Though the global market for UAS includes drones for civil government and pleasure users , it is the commercial sector that is expected to take the lead. The total market is expected to triple from $4.4 billion this year to $13.1 billion in 2027 with the value of commercial drone activity expected to surpass what is currently the largest market for nonmilitary drones—the consumer/hobbyist sector. The jump in the forecast is startling. In the new study , the annual market value for 2026 is $1 billion higher than what Teal forecast just a year ago. The market value over the total 10-year period in the 2017 study was $73.5 billion. The 2018 projection for the 10 years from 2018-2027 inclusive is $88.3 billion. And there is room for even more activity should regulatory barriers or other factors turn more favorable. Teal's 2018 forecast, for example, does not incorporate what is ex- pected to be a huge market for delivery drones as this application is seen as blossoming outside of the 10-year forecast period. Also worth noting is that the study includes the market for agricultural spraying but not other agricultural drone applications as these too have yet to mature. Agriculture will someday be the largest market for UAS, accord- ing to Teal, though it is not expected to reach that potential during the next 10 years . VENTURE CAPITAL Given the industry's prospects , it is not surprising that Teal's 2018 World Civil Unmanned Aerial Systems Market Profile & Forecast finds venture capital (VC) investment jumped from $504 million in 2016 to a record $511 million in 2017 and is on track to exceed that 2017 number this year. Some $316 million in VC backing had already poured into the drone industry in just the first half of 2018. "Figures for the first six months of 2018 show that the record will likely be broken this year particularly since DJI Innovations is planning to seek $500 million to $1 billion in a single investment to prepare for an initial public offering," study author Phil Finnegan told Inside Unmanned Systems. "That one financing will dwarf what is normally done for a full year." Finnegan said Teal follows VC activity directly, analyzing a list of the 91 firms receiving the most venture capital starting in 2012. The investment comes from sources ranging BY THE NUMBERS UAS VENTURE CAPITAL WINNERS* Source: Teal Group 2018 forecast of total market value for civil/commercial drones for 2018-2027 $73.5 B. USD $88.3 B. USD 2017 forecast of total market value for civil/commercial drones for 2017-2026 * The percent of venture capital captured by fi rms in that country from 2012 through the fi rst half of 2018 The 2018 World Civil Unmanned Aerial Systems Market Profi le & Forecast is available at Tealgroup.com . USA–76% China–7% Europe–7% Israel–4% Canada–4% Japan–1% Australia–1% 76 % 7 % 1 % 1 % 7 % 4 % 4 % THE TEAL GROUP REPORT 44  December 2018/January 2019  December 2018/January 2019 unmanned s unmanned s s unmanned ys tems inside unmanned inside inside unmanned The 2018 World Civil Unmanned Aerial Systems Market Profi le & Forecast is available at Tealgroup.com . THE TEAL GROUP REPORT

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