This slide deck was created for an interview for a tech VC and received positive feedback. I hope it's helpful to those interviewing for VC.

1. Investing in
Drone Technology
June 2020

2. History of UAVs

3. Table of Contents
Market
Intelligence
Market
Landscape
Investment
Strategy
Startup
Recommendations

4. Market Intelligence
New commercial uses have given rise to significant market potential. By one estimate, the global revenue
potential in 2025 is ~$50B with a CAGR of 27%. This is one of the more conservative estimates.
Source: Mordor Intelligence

5. Market Intelligence
Energy ($8.2B)
• Compliance monitoring for
extraction, refining and
transportation of oil and
natural gas
• Surveillance of assets
• Exploration and geo-location
of new sites
Other Applications ($5.8B)
• These include civic
governmental use, aerial
mapping, healthtech and
parcel delivery among
others.
Entertainment ($1.1B)
• Widely used for aerial photography
• New application like LED light shows
Construction ($3.1B)
• Low labor solution to
inspection of sites with higher
efficiency and accuracy
Agriculture ($5.1B)
• Low labor solution field inspection
for soil characteristic and plant
growth with higher efficiency and
accuracy
Source: Mordor Intelligence
Each market segment has high potential currently, with a growth rate of 20-25% annually.

6. Market Intelligence
Regulatory Approvals
FAA has granted hundreds of new exemptions for companies to
operate drones in the US through FAA Part 107 since 2016
Longer Range
Military drone sensor technology currently in development can
map 2.7M square miles in a single flight (~48 contiguous US states)
Lower Costs
In order to compete with DJI (subsidized), manufacturers are
finding ways to drive costs down, especially for recreational use
Made in USA is a sentiment that resonates for civic government
commercial applications
Improved Software
Obstacle avoidance, and flightpath planning are some uses of AI
being incorporated into drone software
Strict Airspace and Commercial Regulation
Strict airspace regulations across major countries of the world,
especially the US, where FAA pioneered in setting regulations for the
commercial use of drones in the region
In the US, electronics responsible for communications and control must
comply with DO-254 and DO-178C for software and hardware
Payload drones must comply with out-of-sight take-off and delivery
Customer Inertia in Adoption
With cheap hardware available for immediate use, commercial users
are unlikely to raise demand significantly
Privacy and Safety Hazards
Drone accidents and failures have pushed for higher regulation
Peeping-Tom laws prevent recreational use without requisite permits
New technologies allowing for data transmission and IoT need to
comply with strict privacy laws
Tailwinds Headwinds
Source: Mordor Intelligence, Goldman Sachs Report

7. Hardware
Software /
Analytics Construction
Education
Maintenance
GPS/
Exploration
Agriculture
Energy
Market Landscape
Technology
Industrial
Applications
Ancillary Services

8. Market Landscape
Technology
Industrial
Applications
Ancillary Services
Offering
Core
Innovation
Opport-
unity Area
Hardware, Software Hardware, Software,
Analytics
Services
Improved range, easier
control, better interface,
greater load-bearing, faster
transmission
Modifications for specific
use-case, analytics and
program management
Maintenance services,
educational and training
modules, marketplace
Selling directly to
consumers
Selling to enterprises
Contracting to enterprises
Selling to enterprises
Contracting to enterprises
Contracting to customers
Contracting to enterprises

9. Market Landscape
Technology Industrial Applications Ancillary Services
Company Enterprise Consumer Software

10. Market Landscape
Technology Industrial Applications Ancillary Services
Film /
Photography
Business
Intelligence
Surveillance Logistics

11. Market Landscape
Technology Industrial Applications Ancillary Services
News Marketplace /
Database
Drone Racing Education

12. Investment Strategy

13. Investment Strategy
Hardware technology is considered table stakes. Startups have to
build technology (software or hardware) that enables them to
differentiate themselves.
+ Sensors
Improving sensor technology to allow for drones to better detect obstacles
is going to be important. Additionally, sensor technology for specific use
case like heat mapping and GPS tracking will be essential for industrial
applications.
+Battery Life
Improving battery life or attaching sources of light weight battery power
that can allow drones to be in service for longer and/or travel over longer
distances is going to be important.
+ Software Applications
Drone fleet operations management, program management, flightpath
scheduling, communication, AI are just a few of the software variations
that can make drones more useful.
It’s important for the startup to really understand customer need and
develop a solution accordingly.
+ Business Intelligence
A key area of adoption for business intelligence is in Insurance along with Energy.
While Agriculture is growing, the customers are slower to adopt new technology.
- Surveillance
Surveillance and fast response is the fastest growing market segment owing to
civil government demand, but laws prevent startups to receive investment from
non-US firms.
- Logistics
Amazon Prime Air’s grand plans never materialized and Flexport explains why.
The unit economics involving last-mile delivery compared of pay-load
requirements, regulations and drone maintenance don’t yet tie out. Use case in
emerging markets is attractive but their willingness to pay is low. The only factor
in its side is that large logistics companies are bulling on drone technology and
are looking to acquire.
Technology Industrial Applications

14. Startup Recommendations
Criteria MPower GeoVisual Analytics Betterview
Business Opportunity
Developer of micro-systems
enabled (MEPV) technology for
lightweight solar cells.
Provider of computer vision
technology designed to inspect
farms.
Provider of a drone-based property
inspection platform.
Customer Segment Drone manufacturers Farmers Insurance Agencies
Market Opportunity
$9B annually in 2019 (including
military drones).
Global Precision Agriculture market
was valued at $5.3B in 2018.
Estimated between $2B-$4B.
Insurance companies spend up to
$100M on inspections annually.
Value Proposition
Ability to increase flight time for
drones without adding additional
weight.
Focused software to help increase
crop yield throughout the farming
cycle through more accurate and
precise measurement.
Focused software to help insurance
agencies establish cause.
Safer, faster, and more reliable than
human inspection.
Portfolio Fit High Medium Medium
Competition Low High Medium
Biggest Risks Technology risk
Customer adoption risk,
Competition, Stage
Customer adoption risk,
Competition

15. Startup Recommendations
Next Steps
• Industry Expert Interviews
• Better understand market dynamics, customer demand and stickiness of the product
• Team Interviews
• Determine if they have the requisite background and drive
• Technology Analysis
• Test technology to ensure it works
• Understand IP protection
• Financial Model Analysis
• Determine unit economics, traction, growth (past and future)
• Sensitivity analysis

16. Thank you!