Drone driver Airware ready to take flight

Airware ready to take flight

After four years in development, Airware is officially ready for liftoff.

The San Francisco-based start-up, which has raised over $40 million from top-tier venture capital firms including Andreessen Horowitz and Kleiner Perkins, announced the official launch of its operating system for commercial drones.

Its technology allows companies to use unmanned aerial vehicles for everything from infrastructure inspection to search and rescue missions.

"Airware's approach to the drone space is very unique in that we are one of the only companies in the space not building the drones, but instead building the hardware, software and cloud services that power drones," Airware's founder and CEO Jonathan Downey told CNBC.

Airware, which sells its "Aerial Information Platform" for an annual subscription of $2,500 per drone, also announced Thursday that it secured its first big customer—General Electric, which envisions using drones to inspect pipelines, power lines and oil rigs, among other applications.

"We're confident the company is going to succeed and do very well," says Alex Tepper, managing director at GE Ventures, which invested in Airware. "At GE, we have many different divisions including oil and gas, power, and transportation. Customers are asking us to offer services in this space, especially related to UAVs [unmanned aerial vehicles]."

The drone industry is attracting more interest from professional investors. Investment in 2014 to the drone industry topped $108 million across 29 deals, according to CB Insights. Year-over-year funding jumped 104 percent as VC firms such as Lightspeed Venture Partners and GGV Capital placed bets on the industry.

The five top-funded drone start-ups, according to CB Insights data, are 3D Robotics, Airware, XAircraft, Skycatch and CyPhy.

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Analysts expect the commercial drone industry to grow strongly over the next 10 years as technology improves and prices for drones fall. Still, Frank Gillett, a principal analyst at Forrester, said headwinds for the market include privacy concerns, liability issues and the associated costs in manning drones.

A drone powered by Airware
Source: Airware

"Even for simple drones, somebody has to know what they are doing," Gillett said. "You can't just hand them to an employee. You have to train them. There is a learning curve. "

Another potential challenge for the drone market? Regulation.

Currently, if a company wants to use a drone, then it needs authorization from the Federal Aviation Administration. To date, the FAA has issued 137 approvals for commercial drones.

However, the FAA has also proposed new rules for commercial drones. Specifically, commercial drones would be limited to flying during daytime hours, and below 500 feet. Additionally, drones would have to be controlled within sight of the operator. The FAA could publish these final regulations next year.

Despite possible regulatory hurdles, excitement surrounding the commercial drone industry continues to build. Airware also announced Thursday that it has received an undisclosed sum from Intel Capital, the chip giant's investment arm.

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"This is a new market, and it's just beginning to really grow," says Airware's Downey. "I think the opportunity is enormous. Drones are going to be used across a wide variety of different verticals for a lot of different applications."