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Partnerships May Be the Recipe for Success in Post-Hype Ag Drone Space

May 3, 2019

Drones have been one of the most discussed sectors in agtech, but they’ve also been one of the most precarious. Federal regulations making it difficult to use drones for commercial applications, farmers’ lack of time and patience to learn how to operate unmanned vehicles, and figuring out how to make heads or tails out of the mountains of data are just a few of the hiccups that deflated the initial buzz around drones in agriculture.

If there’s anything the sector has learned in recent years about drones in farming it’s that farmers don’t want to invest tons of time, labor, or cash learning how to operate drones, keeping the complex machines running properly, or trying to glean positive results from their use.

Based on these hard-learned insights, drone startups either need to offer better value for the service, such as focusing less on image-based decision making and more on high-payload aerial spraying or creating devices that require far less human involvement.

In this post-hype landscape, a few drone companies are still going strong and pushing the envelope when it comes to answering farmers’ demands — and still raising noteworthy rounds.

Last year, sustainable fisheries focused startup Saildrone raised a $60 million Series B, drone data analytics startup DroneDeploy raised $25 million, and drone manufacturer Wingtra raised $5.8 million, according to AgFunder’s 2018 AgriFood Tech Investing Report. AgFunder portfolio companies Sentera and Aerobotics also raised rounds last year.

But few startups have cracked the challenges around using drones to carry and spray chemicals onto crops. Limited battery life and limitations on what they can carry are two clear obstacles.

The Payload Problem

Finding a drone that’s strong enough to carry enough of the chemical input required to treat a particular crop is a challenge. There are ample reasons why using a drone to apply chemical inputs would be appealing to farmers, such as a reduction in labor needs and potential for precision, but there are many practical reasons why the technology has not quite landed yet.

“Twenty percent of the acreage in the US is being sprayed by air sprayers, but they are manned with a pilot. It’s a dangerous job and many accidents happen. Insurance is costly as a result and, of course, there are many limitations such as not being allowed to fly at night or at dawn. There are also issues around drift. You also have to have somewhere to take off and to land near the field to be sprayed, and you have to have the capacity to load the chemical inputs onto the plane,” Dani Harari, senior VP of strategy & resources at global crop protection company ADAMA, told AgFunderNews.

ADAMA recently announced a new partnership with Israeli aerospace company Tactical Robotics in a joint feasibility study to see whether Tactical Robotics’ high-payload drones can be used for aerial spraying. The Tel Aviv-based company is focused on providing farmers with solutions to control weeds, insects, and disease while improving yields.

Tactical Robotics has developed a multi-role, high-payload unmanned drone called the Cormorant equipped with vertical-take-off-and-landing capabilities. It can carry a payload of over 500 kilograms, according to the company, and up to 764 kilograms including fuel. The aircraft can also be transported via truck and does not require an airstrip for takeoff and landing. The versatile drone can perform a number of tasks by Tactical Robotics’ account, including everything from logistics and cargo services to firefighting and aerial spraying.

Through the new partnership, the duo will attempt to create an aerial spraying device called the Ag Cormorant. ADAMA hopes to contribute its ag industry-savvy, as well as its farmer-centric approach to the effort.

“When ADAMA approached us with their insights about the potential for Cormorant to answer some of the most pressing needs in the Ag sector, we were extremely impressed by the ADAMA’s forward thinking and innovative spirit,” Rafi Yoeli, CEO of Tactical Robotics, said in a press release announcing the partnership. “Cormorant’s unique capabilities offer solutions to challenges in a variety of sectors and ADAMA’s participation and vision are an important contribution to a valuable application for our Cormorant UAV.”

A platform like the Ag Cormorant has a huge market in agriculture, but that platform can also work for other targets including logistics, autonomous taxis in the future, or even firefighting and rescue, according to Harari. This may make the option even more enticing for investors who see multiple value streams and potential exits down the road.

Drone Partnerships on the Rise

ADAMA and Tactical Robotics aren’t the only ones innovating solutions for the payload problem. Fellow Israeli company Skyx, which offers drone software, recently partnered with heavy payload drone designer Advanced Tactics to take drone spraying to the next level. Skyx and AT are developing a product that can cover hundreds of acres per day while also offering Skyx’s variable rate software to help farmers apply pesticides precisely where they’re needed.

Drone-focused partnerships are popping up in other applications, too, as companies see the need to up their value offer. In August 2018, Canadian drones-as-a-service company Deveron UAS Corp acquired Veritas Farm Management, an agronomic data analytics service for farmers based in Ontario, Canada. Deveron, which sends pilots to fly drones over farmland on request, is now able to offer clients more value through Veritas’ precision ag platform.

“When we first started building our drone network for agriculture, we were somewhat naive in thinking that farmers would be able to generate their own insights from our imagery data,” David MacMillan, CEO of Deveron told AgFunderNews in 2018. “Lots of our customers were saying ‘this imagery is great and useful, but can you help me write a seed script from it or variable rate fertilizer scripts?’ So we started working with Veritas three years ago to support some of our customers with Veritas’ scripts and Veritas customers were also ordering our imagery. And when the option came up to acquire them, I immediately saw the amazing synergies.”

We are still seeing new entrants to the ag drone space, too, despite stiffer demands from farmers. Earlier this year, drone, sensor, and software company SeeTree launched and announced the close of a $15 million Series A led by Hanaco Ventures. The Tel Aviv-based startup had been operating in stealth mode, honing its technology and accelerating adoption of its service with a clandestine list of growers including large-scale citrus growers in California’s orchard heartland.

Standalone drone companies continue to push ahead and it’s clear that they’ve caught wind of what farmers will really need in order to embrace this technology. In February 2018, Boston-based American Robotics raised a $2 million seed round for its autonomous drone system, which it dubbed the first “practical” drone system, named Scout. Users can plan and schedule flights from a computer while the drone is kept in a box in the field that looks similar to a beehive. The drone charges in sleep mode when not in use. When it’s mission time, the top of the box slides open and the drone takes flight.

Beyond orchards and row crops, some companies are still chasing after futuristic applications like on-demand delivery using autonomous drones. Just last month, Google’s Wing Aviation became the first company to receive FAA clearance to start testing a drone delivery service in Virginia, touting the technology as being safer than cars.

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