Dear Startup Investor,

When it comes to spending in America, one sector you can bet the house on being handsomely funded is defense.

Just over $800 billion was earmarked for defense spending in the 2021 U.S. fiscal budget – and that was before the war in Ukraine began. In 2023, that number is set to rise to $816.7 billion.

Of course, part of that spending is allocated toward research and development, much of which finds its way to startups looking to commercialize new innovations and technologies.

And, with the aforementioned focus on Ukraine amidst its war against Russia, the opportunity for startups operating in the defense space are plenty.

But there’s one area in particular that has garnered even more interest than usual in the sector…

Drones.

While consumers find enjoyment out of surveying their cities and taking sprawling pictures from hundreds of feet above ground, these same technologies offer immense value in the defense space.

Much has been made about the use of weaponized drones at war in recent years, however, there is more and more attention – and dollars – being dedicated toward autonomous surveillance.

Skydio, a California-based drone manufacturer, most recently secured $230 million of funding at a $2.2-billion valuation to help build out its manufacturing capacity.

This startup has already been actively involved in the war after donating drones to Ukraine at the beginning of the conflict. Since then, the country has used hundreds to survey the damage to infrastructure, document war crimes, survey terrain, and more.

By the way, that aforementioned government spending on defense certainly helps the startup’s cause.

In May 2022, Skydio received a five-year, $100-million contract from the U.S. Army to perform short-term reconnaissance.

Now, the company is focused on ways to help streamline the data and images received from these drones.

“It’s still very early days compared to what’s possible,” Skydio CEO Adam Bry told Bloomberg. “We are playing a very long game here.”

Of course, this is only part of the story when it comes to the development of autonomous drones – and not all of them are strictly geared toward defense.

Parallel Flight Technologies, a startup we featured in 2022, has 48 letters of intent – valued at up to $600 million – for its long-range autonomous drones geared toward combating wildfires.

In addition to this, the startup offers immense value to disaster relief, infrastructure management, agriculture, and, yes, defense.

For those looking to get a stake in the autonomous drone boom, Parallel Flight Technologies recently unveiled a new Reg CF equity crowdfunding campaign.

Click here to read more and invest.

The A+E Network Deal Research Team