The world’s largest maker of commercial drones and one of Silicon Valley’s leading venture capital firms want to kickstart the drones ecosystem.
Today, Accel Partners, a VC firm that’s backed heavyweights like Facebook, Dropbox, and Spotify, announced SkyFund, a new drones fund in conjunction with China’s DJI, the maker of popular quadcopters like the Phantom and the Inspire.
The new venture aims to pump a minimum of $10 million into early-stage hardware and software startups developing tools that both the enterprise and consumer markets can use on DJI drones. It plans on investing a minimum of $250,000 in each startup it funds, and possibly more. Over time, it may expand the fund beyond $10 million. The timing is good: according to this year’s report on Internet and other trends from Kleiner Perkins Caufield & Byers’s Mary Meeker, the consumer drone market over the past two years looks downright hockey-stick-ish. Check page 82 of the report to see just how big it has grown.
The fund will also be used to boost technologies in the “booming field of robotics and intelligent machines,” Accel wrote in a blog post.
The announcement of SkyFund comes just a couple weeks after Accel said it had invested $75 million directly in DJI.
“We’re not just providing financing…for early-stage companies, but also technology and go-to-market resources to help these companies build interesting component applications,” says Sameer Gandhi, one of the partners at Accel overseeing SkyFund, which is expected to invest in the developers of tools for the mapping, imaging, agriculture, oil and gas, and mining industries, among others. “We think there’s a whole opportunity to feed a series of companies doing these types of applications.”
For DJI, the hope is that by putting its time and money into startups developing for its platform, the size of its overall market will grow quickly. Already, DJI has made early forays into expanding the size of its ecosystem by releasing a software developers kit that allowed outsiders to build for the platform, as well as a set of APIs. Now, it’s doubling down on the strategy of expanding the ecosystem outside of what it can build and design itself.
“Our hope is to [enable the creation] of the kind of services that create the demand” for our drones, Michael Perry, who heads up DJI’s marketing, tells Fast Company. “There’s a bunch of people already developing services and hardware and software that open up the drone market in significant ways, and this is just to further that development and to open up the drone market.”
Perry said that DJI expects to offer startups a range of technology and expertise as they work to build tools for the drone maker’s platform. That means the company will offer technical assistance, as well as early access to prototype hardware and software, and possibly even co-marketing support.
SkyFund isn’t the first specific technology-focused fund, of course. Accel, for example, had previous funds aimed at big data companies, as well as at startups developing for Facebook’s and Dropbox’s platforms. Other famous efforts include a $100 million Kleiner Perkins Caufield and Byers iPhone app fund, and more recently, an accelerator for virtual-reality startups.
While SkyFund is focused on DJI’s drone ecosystem, Accel is clearly hoping it will also boost the larger, global drone and advanced robotics markets. According to a January report from Radiant Insights, the global commercial drone market is expected to expand from $609 million in 2014 to $4.8 billion by 2021.
“We’re really interested in seeding activity in companies doing these applications,” Gandhi tells Fast Company, “regardless of what the underlying platform might be.”
That’s shorthand for saying that Accel is at least somewhat open to the idea of funding startups developing for DJI competitors, such as 3D Robotics. But Perry said from his perspective, the fund would focus solely on those working on expanding the DJI ecosystem.
Still, Perry said DJI wants to see a wide range of thriving businesses in the drone space across many different industries. “So for us, the yardstick [to measure the fund’s success] is, what does the overall drone market look like in two to three years, and does it address the wide variety of companies that could use this kind of technology?”