After years in which drones were seen as the preserve of hobbiyists, extreme sports or amateur photographers, traditional industries are beginning to discover them, too. The recognition of their potential has contributed to the rise of startups developing solutions for this growing market. And, as ever, Israel isn’t left behind.
One of the people giving drone use a commercial tailwind is Amazon CEO Jeff Bezos, who announced in 2013 that his company would develop drones to deliver products. Google soon followed with Project Wing, which was established to offer a host of civilian solutions. Google’s parent company, Alphabet, recently received permission from the White House to conduct experiments with prototypes in the United States.
Market researcher PwC found that areas like infrastructure and agriculture could derive the most benefit from introducing drones into their markets. “Insurance and mining will find potential process improvements as they gain new levels of data quality and accessibility,” the report stated. PwC consultants expect the entire transport and short-range delivery industries to change completely.
The U.S. Federal Aviation Administration added to these developments with its June publication of drone operational rules, by which a commercial drone operator won’t need a pilot’s license but rather a remote pilot certificate, subject to testing. “Those were pretty high barriers to entry,” Adam Lisberg, spokesman for drone producer DJI, told The Verge.
The Civil Aviation Authority regulates drone usage in Israel. Its first and foremost requirement is eye contact between the operator and the drones. Likewise, permits are for flights up to an altitude of 100 meters and up to 500 meters from the operator. There are a few areas forbidden to drones such as security zones, airports and a 1,500-meter radius around Temple Mount.
The most important rule, according to Benny Davidor – head of the authority’s unmanned aerial systems section – is the ban on flying drones over people, although companies that pass the authority’s safety checks are exempted.
PwC compared the influence of drones entering use to the computer revolution of the 1980s: Just as computers allowed businesses to reorganize how they operated, drones offer a similar opportunity, they say.
The market researcher values the global market for business services using drones at over $127 billion.
As in other high-tech trends, it seems Israelis understand this emerging market’s potential and dozens of drone-focused startups have taken off in the past two years. Some have grabbed headlines recently, either for the amount of funding they raised or for winning global competitions.
Much to contribute
“We have much to contribute as Israelis,” says Gil Ben-Artzy, a founding partner of the UpWest Labs fund, which invests in nascent Israeli startups. The fund has invested in Airobotics, which is developing an autonomous drone for industrial facilities. “A lot of knowledge has accumulated over the years, both in local high-tech and the military. It’s a relatively new field with technological depth, and Israelis are mostly strong in these areas.”
So far, most global funding rounds for drone-technology companies have been relatively small and in early stages, indicating that the market is still emerging. A study by high-tech researcher CB Insights found $450 million in investments in drone companies in 2015 – 67% of these were early stage investments. Considering regulation changes, hardware price decreases and further developments, it’s highly likely these figures will only increase in the near future.
“It’s a relatively innovative industry and the type of field that’s not simple to invest in,” says Ben-Artzy. “There’s a lot of hardware development here, and the business environment remains unclear. The base is technological know-how. It’s not enough, but it will develop. It’ll take time, but the field is growing.”
As noted, PwC identified infrastructure – energy, roads, railways, oil and natural gas – as having the greatest potential, with $45.2 billion. Agriculture was second with $32.4 billion.
The report speaks not only of saving time but also money. For example, performing a wind turbine inspection currently costs about $1,500 per tower, but a drone “cuts the cost by around 50%.” Similar savings can be made with inspections of bridges and tunnels, “where the costs of in-person inspections are even higher,” the report states. More advanced drones will be able to make repairs in those sites, with support from another growing industry – 3-D printers – attached to them.
A slightly different field in which the ability to scale heights is an advantage is communications. For example, AT&T recently announced it would use drones to expand its wireless coverage.
Airobotics recently completed a second round of funding worth $28.5 million. Founded in 2014 by Ran Krauss and Meir Kleiner, they started out developing drone photography, then produced parachutes for drones to prevent crashes. Now, it provides a product including a drone, an autonomous piloting system, and docking and charging stations.
The company markets to mining, seaport, and oil and gas companies dealing with securing facilities; Israel Chemicals is one of its clients. “Our system allows you to send the drone on a variety of missions,” says Krauss. “It eliminates the need to use a drone operator – the most expensive part of operating drones – thus significantly lowering costs.”
Airobotics supplies a kit, including an automatic battery changer using a robotic arm at the docking station. The company employs 70 people, all in Israel.
Another Israeli company, Airscort, also develops docking stations, which are more compact than those of Airobotics, and uses autonomous drones. It is in one of the Israeli finalists in accelerator Mass Challenge.
Another Israeli company in the news recently because it won a contest organized by blog TechCrunch in Tel Aviv is Arbe Robotics. The company, founded in 2015, develops a cheap, lightweight and energy-efficient radar. Arbe’s development suits many industries, both amateur and commercial. “The system will help anyone who wants to fly a drone to take a selfie avoid hitting a high-tension cable or trees in the area,” says CEO Kobi Marenko.
“In the commercial environment, the radar will provide full autonomous flying that will assist with deliveries, border patrols and crops assessment,” he says. “Our radar enables the identification of every little obstacle in ranges of over a kilometer, even in harsh conditions.”
Arbe Robotics employs 12 people and has raised $1 million to date.
Another Israeli startup in the infrastructure field is Dronomy, which develops autonomous drones for construction. Planning for the job is done with a tablet. The drone takes off, flies, photographs and lands autonomously. The images yield 3-D models and measurements of a construction site, providing organized, detailed and frequent documentation of it.
CEO Ori Aphek and Guy Raz (vice president for research and development) cofounded the company in 2014. Their product is in the alpha version, which they are demonstrating in Israel and abroad at the sites of potential clients. The company has raised $1.5 million so far and is in the midst of another round of financing. Aphek is an example of the way in which military know-how makes its way to civilian areas. Dronomy’s background lies in his military service in the Israel Air Force, where he was involved in developing autonomous flying capabilities for drones.
Some other entrepreneurs founded 3rd Eye Systems in 2010, utilizing their familiarity with the security industry. The company got its start from the development of sensor-based products for discovering threats while in motion. “The goal is to allow autonomous devices to reach into other areas, such as security at civilian facilities, in a way that saves on manpower, is safe and is more efficient in carrying out assignments,” says CEO Lior Segal, also one of its cofounders along with Yoel Motola and Gil Barak.
Similarly, the PwC report also notes the increased usage of drones in technologies that integrate machine-learning software: these know how to identify what is being filmed in real time, similar to systems that are currently being developed for autonomous cars. “PwC estimates the addressable market of drone-powered solutions in [the] security industry at $10.5 billion,” the report stated.
Maritime drone services
Another interesting solution is based on the military experience of its developer – albeit not so much because of the exceptional technologies he was exposed to, but rather, the opposite. CEO Dan Danay, a naval officer, founded the startup Airmada with Boris Lipchin, whom he met at MIT. The company participated in the leading accelerator Y Combinator last winter.
As a missile boat officer, explains Danay, he noticed the inefficiency of maritime deliveries, especially package deliveries coming from the shore. “In order to deliver goods, documents or parts from ports to anchored areas, shipping companies hire the services of motor boats,” says Danay. “These deliveries are expensive and eat up a lot of time for the ships, which, more than once, are forced to be weigh anchor, waiting for a delivery,” he adds.
According to Danay, Airmada conducts autonomous maritime deliveries at low cost and more quickly. Progress in the maritime field allows the company to use existing technologies and provide secure services, with regulatory approval, because it’s a simple task in an open area with few dangers and security obstacles.
Airmada says it is currently providing services for the Panama Canal, with the approval and cooperation of the local authorities.
Another drone delivery company, Flytrex, is developing a hardware component that is then installed on the back of drones; this connects them to a cellular network via a SIM card. This device allows you to receive real-time information from the drone about its location, speed, altitude and other data. The company built a system around this that’s connected to controlling drones in real time in an area that is autonomous, so that company operators will be able to sit in control rooms and watch the drones via the system. The product currently operates in five countries.
“We also started working in Israel to be the first entity to supply deliveries,” says Flytrex founder and CEO Yariv Bash. “We estimate that within a year, we will see drones making deliveries.”
“Even if we won’t see them placing a package in our front yard tomorrow morning, we expect to see more investor money entering the field,” says Ben-Artzy of the UpWest Labs fund.
“I don’t know how many years it will take until we see urban use of this technology, but we are already seeing its use in industry,” he adds. “And that interests us, the investors, more. With a rise in usage, regulation will also change and the field will experience growth,” he concludes.