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Inside the skyrocketing business of drones

The commercial drone industry is seeing explosive growth, and one start-up is betting that the real money will come from delivering drone software and services — rather than manufacturing the flying devices themselves.

DroneDeploy (No. 25 on CNBC's Upstart 25 list) is one of the leading drone data platforms helping builders, farmers, miners, scientists and others make sense of images from above.

"We doubled our team in the last six months, and we doubled the capabilities of our product," said DroneDeploy CEO Michael Winn. "The market has been reacting by flying a lot more drones over a lot more things."

DroneDeploy aims to build the go-to operating system for drones.

Its software automates drone flight, allowing users to fly drones made by market leader DJI with the tap of a mobile app. The drone flies a path preset by the user and captures images of the ground. Users then upload the aerial images to the cloud where DroneDeploy's software analyzes the data to create interactive maps and 3-D models. It offers a free service for casual users, but most business users pay for higher levels of service that range from $99 to $299 a month.

DroneDeploy also launched an app store in November, which lets developers sell custom apps for industry verticals, and in February it hired two new executives, from Salesforce and Netsuite, to help service larger customers and announced a deal with premium drone manufacturer Aeryon.

Construction and agriculture

The Federal Aviation Administration passed new rules for commercial drones in June, and that has helped propel the industry forward. Construction companies are the fastest-growing part of the drone software business, said Winn.

DroneDeploy customer Brasfield & Gorrie General Contractors' construction site
Source: DroneDeploy
DroneDeploy customer Brasfield & Gorrie General Contractors' construction site

Among the company's construction customers are Brasfield & Gorrie General Contractors, one of the nation's biggest privately held contractors; and Rogers-O'Brien, a leading general contractor in Texas.

"Construction companies have been some of the first to get certified and get drones active on their construction sites," he said. "We are just doing bigger deals."

The DroneDeploy software used by Brasfield & Gorrie General Contractors to mark points on a build site
Source: DroneDeploy
The DroneDeploy software used by Brasfield & Gorrie General Contractors to mark points on a build site

In February, DroneDeploy announced a deal with agricultural equipment retailer CNH Industrial to bundle its software with their drones.

"Drones have become farm machinery," said Winn. "They are trying to provide the full solution." CNH has more than 1,000 stores nationwide.

A DJI drone mapping farmland
Source: DroneDeploy
A DJI drone mapping farmland

Growers can download apps — including one from John Deere — to examine crops and detect parasites and fungi, generate variable plans for targeted use of pesticide and nutrients, negotiate with insurers when crops are lost and assess and clean up after storm or tornado damage, among other things.

DroneDeploy
Source: DroneDeploy

DroneDeploy users have mapped and analyzed more than 8 million acres in over 135 countries — the largest drone-gathered data set from the largest number of customers in the world — and the data is doubling every four months, said DroneDeploy chief of product Jono Millin.

DroneDeploy
Source: DroneDeploy

Founded in 2013, the company has raised $31 million in venture capital funding at an $83.3 million valuation, according to PitchBook. It is now seeing "explosive growth," said Winn.

"We doubled our team in the last six months, and we doubled the capabilities of our product," he said. "The market has been reacting by flying a lot more drones over a lot more things."

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