It’s official: California-based Skydio, widely considered the leading competitor to China’s DJI, is leaving the drone consumer market for good.  The company made the public announcement last week, saying it was a “very difficult decision,” but noting that Skydio had made enormous strides selling its state-of-the-art indoor inspection drones to commercial enterprises and governments the world over – and simply needed to refocus its energies.

The announcement came as a shock to some of Skydio’s long-standing customers but not to industry insiders who have watched the company’s consumer sales sag.  while revenues from its offerings in the commercial and government sectors have soared.  The decision also comes on the heels of Skydio’s last two successful investment rounds, including $230 million from Andreessen Horowitz, Next47, DoCoMo, the Walton Family Foundation and Hercules Capital, bringing total investment gains this past year to $562 million, with an overall company valuation of $2.2 billion – all of it geared to Skydio’s new direction.

How popular is Skydio?  More than 1,500 public and private agencies, including most branches of the US Department of Defense and well over half of all local and state Departments of Transportation use Skydio drones.  In addition, over 200 public safety agencies in 47 states deploy Skydio drones.  Skydio’s also moving into construction, communications, fire-fighting and disaster relief.  Earlier this year,  the company received a BVLOS waiver to conduct inspections at Dominion Energy, one of 60 major grid facilities that have contracted with Skydio in the past year alone.  Only one other drone company –  Israel-based Percepto – has managed to secure a BVLOS waiver for infrastructure inspections – but on a much smaller scale.

The key to Skydio’s success is its state-of-the-art inspection drone tandem:  Drone Dock and Remote Ops.  Drone Dock can release an entire fleet of drones to fly autonomously with a single manager using Remote Ops to monitor flights, gather sensor data, and make flight adjustments based on predictive analytics.  The drones can fly outdoors in inclement weather but also conduct indoor inspections in GPS-denied areas, including warehouses but also in train and subway tunnels, as needed.  Drone sensors are able to detect and avoid obstacles, making crashes and collisions a rarity.  While Skydio does have real competitors – including Flyability and ScoutDI, as well as Percepto – – no other drone company offers such a comprehensive set of safe and efficient inspection services for both indoor and outdoor use.

And the world is taking notice.  Last June, in recognition of Skydio’s unique capabilities, Japan’s civil aviation authority granted Skydio a virtually limitless waiver to conduct BVLOS inspections nationwide.  The waiver will allow Skydio to fly anywhere in the country to inspect the full range of commercial and public infrastructure.  The company won’t have to register its proposed operations or seek regulatory approval on a case-by-case basis.  It won’t even have to provide air traffic controllers with a schedule of its flights; moreover, no ground or video monitoring of the flights will be required.  Skydio, in effect, will be as free as a bird.  This is another big feather in Skydio’s cap.  No other drone company in the world has received such an unlimited country-wide BVLOS waiver to date.

Skydio isn’t the only major drone company to exit the consumer market to try to consolidate its operations in the government and enterprise sectors.  France-based Parrot has also taken the plunge of late.  Part of the impetus for doing so is the decision of the US Defense Department to welcome additional suppliers besides DJI.  But it’s also a recognition that the drone market is expanding and diversifying rapidly; for some, specialization in selected niches – in this case, infrastructure inspection – may be the best path forward.  Skydio, in a separate announcement, says it’s about to unveil a new inspection drone, the X3, that includes enhanced sense-and avoid-technology and cameras equipped for nighttime operations.  The company plans to unveil the new drone at its first-ever user conference, Ascend, which is scheduled for September 20, 2023.  This is a big year for Skydio but even bigger things lie ahead.