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AirMap – Air Traffic Control for Drone Operators

Drones are coming whether U.S. infrastructure is ready or not. Market researchers say that by 2020, millions of drones could be used to deliver packages, inspect infrastructure, and monitor activities. All of this excitement leads to charts like this one which shows some sick growth:

Source: Grand View Research

Now before you go rushing out to invest in all this growth, just keep in mind the sort of muppets that put these estimates together. Here are a few examples of the broad range of  “drone market growth” estimates we came across while researching this article:

  • $1.8 billion by 2020
  • $11.2 billion by 2020
  • $100 billion 2016-2020

$100 billion is a big, round, fcuk-yes number so we’re going with that one. BTW, if you’re an MBA who is trying to forecast “drone growth”, you can pretty much just come up with a number between $1.8 billion and $100 billion then supplement it with charts like the one above and you should be ok. Talk about how the industry needs to “innovate or die”, the overlap of segmentation in the “total addressable market”, and the need to proceed with “cautious optimism”. Go to the pub early. You’re welcome.

It doesn’t take an MBA to figure out that this market is growing due to the increasing number of commercial applications across industries. We’ve covered some examples like agriculture and transportation, but this market map from CB Insights shows just how fast this thing is spreading:

Drones are already proving to be useful in public safety, cinematography, and delivery applications as well. While drone flying is mostly seen as a hobby now, it will soon become an integral part of logistics and monitoring operations around the world. Before that takes place though, there are numerous issues that must be worked out before drones can be relied upon by companies. Chief among these issues is that there is no infrastructure in place to manage that amount of air traffic. A drone could crash into another drone, violate a restricted airspace incurring fines, or worse yet, interfere with a passenger airplane. 

AirMap – Air Traffic Control for Drones

Click for company websiteEnter AirMap — a Santa Monica-based startup that aims to lay the groundwork for drone air traffic control. AirMap has raised $43.6 million in total funding so far with a list of investors that include Qualcomm, Microsoft, and Airbus. AirMap was co-founded by Greg McNeal, a law professor at Pepperdine University who advises the Federal Aviation Administration (FAA) on drone regulations, and Ben Marcus, the current CEO of the company. The company already provides data and services that help improve the routing and safety for millions of drones. With the Company’s $26 million Series B round closing in February 2017, AirMap intends to use the funding to open new offices in Berlin and California, while continuing to develop and expand its air traffic management systems. Just look at how complex the “drone restricted airspace” is becoming:

In late 2016, AirMap made a big step forward by partnering with DigiCert to issue verification and identification for their air traffic management system. Interestingly, the drone IDs will be SSL/TLS certificates, just as a website or any other device would for privacy. The drone IDs will be used to authenticate the drones in the AirMap system. Under the proposed system, drone owners would receive their own digital drone ID when they first register with AirMap. It’s important to know that this ID would be different from the one issued by the FAA to drone owners, which may lead to some confusion. Jared Ablon, the Chief Information Security Officer of AirMap has said that he hoped the SSL/TLS certificates could be used outside of their own services and become an industry standard in order to improve security and continuity between services.

In mid-March, AirMap also announced a new partnership with one of Japan’s largest tech companies, Rakuten (TYO: 4755). Rakuten is a Japanese e-commerce company that is one day hoping to use drones to deliver orders, much like Amazon (NASDAQ: AMZN). The joint venture includes working together to develop the traffic management system for drones. The company has been testing drone delivery since June 2016, making them a natural partner for AirMap.

AirMap’s Features

Let’s take a look at the different features that AirMap promises in their system:

  • Situational Awareness – AirMap’s system sends a secure flight notice from a drone operator to airspace authorities. Directly within the app, drone operators can create a flight, give notice to authorities, or even message another drone pilot.
  • Collision Avoidance – AirMap uses FAA and international surveillance data from PASSUR to detect and avoid potential collisions for any drone connected to their system.
  • Security – AirMap’s platform comes with a number of security options that include remote drone identification and encrypted communications.
  • Route Optimization – When a new flight is planned through the AirMap app, the app will make several suggestions using airspace intelligence to improve the speed, safety, and potential outcomes of any specific flight.
  • Authorization and Direct Communication – The AirMap system allows authorities to authorize every drone that connects to the system. It also allows for conditional requirements for automated authorization.

While AirMap clearly has a long way to go before they become the defacto drone airspace management solution, these features represent a good start to meeting the requirements that could one day be outlined by the FAA. There will, however, be hurdles that the company must overcome before they are able to secure their space within the drone industry.

Regulatory Hurdles

While so far, a number of companies have conducted drone delivery tests, usage of drones has been limited. Even the FAA has admitted that drone deliveries are at least a few years away due to the regulatory hurdles. Currently, RTCA, the non-profit that is working as the FAA’s technical adviser, is beginning to release whitepapers and define some of the technical standards for drone flight and operation. However, their first report is still not available at this time. Meanwhile, Amazon has partnered with the U.K. government to begin conducting drone delivery tests, despite being upset at not being able to reach a similar deal with U.S. agencies.

Although the FAA released their first set of initial drone regulations in June 2016, little progress has been made since. The released regulations only covered drones that weigh under 55 pounds, fly under 400 feet, and remain within the line of sight of the drone operator. Of course, using drones for deliveries would require drones that weigh more than 55 pounds, and would mean that the drone flies out of the view of the operator. Until the FAA is ready to take the next step, drone companies and retailers will be stuck waiting.

Competition

AirMap’s road to success will be a tough one due to a competitive environment. The competition not only comes from other startups like Unifly, but also large corporations like Amazon

Click for company websiteUnifly is an Antwerp, Belgium-based company that was founded in 2015 and has raised $5.29 million through their Series A funding round. Their goal is to create a drone air traffic management app based on current aviation standards. The Company currently offers four different products, each aimed at the different needs of drone operators and authorities. They represented the closest competition that AirMap has in the space, but have enjoyed substantially less funding.

Update 07/02/19: Unifly has raised $19.21 million in a Series B round for its drone traffic management software. This brings the company’s total funding to $26.22 million to date.

Click for company websiteIn May, Amazon announced that they were opening a research and development center in France focusing specifically on creating traffic management software for drones. Apparently, Amazon’s response to the FAA’s slow progress has prompted them to invest in the technology more heavily themselves. It is clear that the company is eager to push the envelope on unmanned flights and is willing to work with any regulatory institution around the world to push their goals forward.

Conclusion

The drone traffic management industry is one that presents the opportunity for huge growth – like $100 billion dollars. AirMap has positioned themselves as a leader in their space, in large part due to the vote of confidence that they received from companies like Qualcomm, Microsoft, and AirBus during recent funding rounds. However, there will be significant regulatory and competitive hurdles that must be overcome in an industry where there will likely be few winners.

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