Fund focus: Accel, DJI to expand drone ecosystem

The new SkyFund, which comprises equal contributions of $5 million from Accel and DJI, will support all kinds of drone-related hardware and software that extend the technology into different areas, such as agriculture, oil and gas, and other industrial sectors. Each category will require specific software, whether it involves inspection, mapping or imaging, to be relevant to its user base. 

"DJI has large SDK [software development kit], which basically exposes its hardware to the software. Everyone in the world could build applications on top of DJI's hardware now," says Vasant Natarajan, a partner at Accel.

The fund will invest a minimum of $25,000 per company and will consider start-ups within China and globally. In additional to capital, investees will receive product and technical resources from DJI, access to preferred demos and beta programs, and co-branding opportunities.

There may also be the potential to sell products to DJI's customers in the future. Accel, meanwhile, will leverage its experience with its current and past portfolio companies to help scale up these nascent businesses.

At present, DJI's products are used by customers in more than 100 countries for applications including film, construction, inspection, nature conservation, firefighting, and agriculture. Frost & Sullivan estimates that DJI accounts for 70% of the global consumer drone market.

Although the fund was only launched a few weeks ago, Natarajan says the response has been overwhelming. The VC firm has interacted with more than 150 drone-related start-ups from different countries. Some have already raised capital from other investors and they are looking to the SkyFund to participate in larger later rounds, while others are just getting started.

The fund is expected to back 25-30 start-ups in total, with the first couple of investments scheduled to close in the next few months. Beyond that, selected portfolio companies will receive follow-on funding from Accel, DJI, or possibly both.

Natarajan says the primary purpose of setting up a drone-dedicated fund is to encourage larger entrepreneurial activity in the unmanned aerial vehicle (UAV) space. To be part of the SkyFund, entrepreneurs don't have to be exclusive users of DJI's SDK technology. Other technologies are also welcome.

"I don't think the SkyFund will necessarily invest in competing technology," he says. "We anticipate investing in potential hardware component makers, battery technology providers or router operators. Hopefully they're contributing to the progress of drones, and so in the end, they are brought into the ecosystem and make drones more accessible to everybody."

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• Topics
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• Fundraising
• Early-stage
• Technology
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• Accel Partners
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