Industry research
Scope
US
Companies
54
Table of contents
What does the drone technology market landscape look like in the US?
The US drone market exhibits varied levels of consolidation across segments. The defense and security drone sector remains concentrated among a limited set of approved suppliers and faces competition from large aerospace and defense conglomerates such as RTX (Raytheon; US), Lockheed Martin (US), Northrop Grumman (US), L3Harris Technologies (US) and General Atomics (US). In contrast, the US commercial and consumer drone markets are dominated by DJI (CN), capturing ~70% and ~85% of market share, respectively. However, DJI’s dominance has been eroding in the US due to national security restrictions, federal procurement bans and increasing adoption of domestically manufactured alternatives. Some larger players in this sector expand through strategic acquisitions that add technological capabilities and reduce barriers to international markets. For example, Axon Enterprise acquired Sky-Hero, a Belgium-based drone player specializing in tactical quadcopters. To compete, some niche specialists differentiate through endurance and performance specialization, battery innovation and alternative propulsion methods. For instance, Heven uses hydrogen fuel cell technology, enabling its heavy-lift drones to achieve flight times up to ~5 times longer than battery-powered alternatives.
What is the level of investor activity in the US's drone technology industry?
Investor-led interest has been significant, with ~72% of identified assets backed by financial sponsors (as of August 2025). Sponsor-led activity has reshaped the drone technology landscape with large late-stage rounds, enabling incumbents to accelerate product breadth and market reach. To illustrate, Anduril Industries secured a ~$2.5bn Series G round in 2025 at a ~$28bn valuation to expand manufacturing capacity and accelerate development of autonomous systems (TechCrunch, February 2025). VC investment in US defense technology, including drone-related startups, rose by ~33%, reaching ~$31bn (Business Insider, April 2025). Herein, sponsor-led interest mainly stems from (i) the advancements in technologies (e.g. AI, autonomous systems) that enhance reliability, reduce lifecycle costs and increase use cases, (ii) the rapid growth of strategic government orders and defense mandates that expand certification pathways and procurement support, (iii) the need to modernize aging US infrastructure where drones provide faster and more cost-effective inspection methods and (iv) the rise in sustained global conflicts that increase demand for defense-related drone applications. On the other hand, deterring factors for investors include (i) stringent privacy and data security concerns that threaten adoption, (ii) persistent supply chain dependencies on Chinese components that expose the industry to cost spikes and manufacturing delays, (iii) market oversaturation from an influx of small-drone suppliers that risks contraction and investor pullback and (iv) complex regulatory approval process from the FAA that slows commercial deployment timelines and increases compliance costs.
What are the key ESG considerations in the US's drone technology industry?
ESG topics primarily revolve around environmental and governance matters. Environmental concerns primarily relate to electronic waste from short-lived drones, energy-intensive manufacturing, poor lithium-ion battery recyclability and the risks drones pose to wildlife and their habitats. To address this, incumbents adopt cleaner technologies and sustainable practices, including recycling initiatives, end-of-life disposal programs, modular and repairable drone designs, renewable charging systems and quieter platforms. Governance topics mainly relate to national security and data privacy, including risks of unauthorized access to drone-captured data, foreign-linked technology concerns and vulnerabilities from imported components. To manage this, incumbents invest in domestically sourced components, implement end-to-end encryption, strengthen cybersecurity protocols, pursue compliance certifications and ensure supply chain transparency through US-based manufacturing.
The global drone market was valued at ~$21.3bn in size in 2022 and is expected to grow to ~$105.4bn by 2032 (+17.3% CAGR 2022-2032; Quantiva Consulting, January 2025)
Technavio (January 2025) estimates that the global commercial drone market generated ~$19.8bn in revenue in 2024 and forecasts it to reach ~$122.5bn by 2029 (+44.0% CAGR 2024-2029)
The advancements in AI, autonomy, battery performance, imaging sensors (e.g. LiDAR) and high-resolution cameras have boosted the growth of the drone technology market. These improvements have enhanced operational reliability, reduced lifecycle costs and expanded the range of use cases across various applications. To illustrate, AI-enabled predictive maintenance for drones cut average downtime by ~25% (interviews by Gain.pro; Gitnux, April 2025; Forbes, September 2024)
The rapid growth in strategic government orders and defense mandates has triggered a surge in capital investment and market confidence in the US drone technology market. Through initiatives such as the 'Unleashing American Drone Dominance' executive order, recent Defense Department policy memos, formally expanded Blue and Green UAS certification pathways and reshoring trends, the US government lowers barriers for US-made drones, streamlines federal procurement and broadens grant-based as well as commercial support (interviews by Gain.pro; DroneLife, July 2025; The White House, June 2025)
The aging US infrastructure drives drone adoption as they offer a faster and more cost-effective alternative to manual inspections and allow early detection of issues (e.g. sagging lines, encroachments, material fatigue). To illustrate, traditional bridge inspections require ~1–3 days with heavy equipment and shutdowns, whereas drones scan and record entire structures within hours with minimal setup (interviews by Gain.pro; Wired, April 2025; Skydio, March 2023; Consortiq, October 2022)
Stringent privacy and data security concerns threaten public trust and broader adoption of drones. According to a Teledyne FLIR survey, ~85% of US drone users express serious concern over data security and demand control over where their imagery is stored, with fears of access by foreign entities (Tech Radar, June 2025; Drone DJ, September 2024; Teledyne FLIR, September 2024)
Supply chain disruptions and foreign dependencies pose significant risks to US drone manufacturing, as the industry remains heavily reliant on Chinese components such as lithium-ion batteries, sensors, motors and flight controllers. The recent trade war has triggered sharp price hikes of up to ~3.5x, acute shortages and delays, while geopolitical US import restrictions increase costs by cutting access to low-cost foreign suppliers, constrain manufacturing timelines and leave the sector vulnerable to supply-side shocks that undermine competitiveness and innovation (interviews by Gain.pro; Medium, July 2025; Financial Times, June 2025)
The influx of numerous US companies that manufacture nearly identical small drones for military contracts destabilizes the market and causes oversaturation. With the Pentagon expected to purchase only ~10–15k drones annually, this excess of suppliers is likely to cause market contraction, investor pullback, price cuts and the collapse of many firms (Business Insider, June 2025)
With the full report, you’ll gain access to:
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 54 private companies, incl. financials, ownership details and more.
A view on all 180 deals in the industry
ESG assessments with highlighted ESG outperformers
