Founded by Google veterans and backed by $340 million from major VCs, Skydio is creating drones that seem straight out of science fiction—and they could end up in your neighborhood soon.

Three years ago, Customs and Border Protection placed an order for self-flying aircraft that could launch on their own, rendezvous, locate and monitor multiple targets on the ground without any human intervention. In its reasoning for the order, CBP said the level of monitoring required to secure America’s long land borders from the sky was too cumbersome for people alone. To research and build the drones, CBP handed $500,000 to Mitre Corp., a trusted nonprofit Skunk Works that was already furnishing border police with prototype rapid DNA testing and smartwatch hacking technology.

Mitre’s unmanned aerial vehicles didn’t take off. They were “tested but not fielded operationally” as “the gap from simulation to reality turned out to be much larger than the research team originally envisioned,” a CBP spokesperson says.

But the setback didn’t end CBP’s sci-fi dreams. This year, America’s border police will test automated drones from Skydio, the Redwood City, Calif.-based startup that on Monday announced it had raised an additional $170 million in venture funding at a valuation of $1 billion. That brings the total raised for Skydio to $340 million. Investors include blue-chip VC shops like Andreessen Horowitz, AI chipmaker Nvidia and even Kevin Durant, the NBA star. It’s not clear just how fast its drones are selling. Dun & Bradstreet estimates its 2020 revenues were firmly sub-$5 million, a figure Skydio says is “significantly off-base.” What is clear is while the company isn’t pre-revenue, it’s still early days in terms of sales. The Army and Air Force spent $10 million on its drones in the last two years, but much of that revenue came in 2019. By Forbes’ calculation, based on documents obtained through Freedom of Information Act (FOIA) requests and Skydio’s public announcements, more than 20 police agencies across the U.S. now have Skydios as part of their drone fleets, including major cities like Austin and Boston, though many got one for free as part of a company project to help out during the pandemic.

Adam Bry, Skydio CEO and cofounder.

The company was founded in 2014 by ex-MIT and Google unmanned flight specialists with ambitions that go far beyond policing the borders. Gawky, dark-haired and stubble-cheeked, with the manner of a Star Trek ensign, 34-year-old Skydio cofounder and CEO Adam Bry believes his company will lead the world to a place where drones don’t need a pilot, whether they’re helping police, inspecting bridges or delivering goods. “We‘re solving a lot of the core problems that are needed to make drones trustworthy and able to fly themselves,” he says from his home, two blocks from Skydio headquarters just outside of San Francisco. “Autonomy—that core capability of giving a drone the skills of an expert pilot built in, in the software and the hardware—that’s really what we’re all about as a company.”

It claims to be shipping the most advanced AI-powered drone ever built: a quadcopter that costs as little as $1,000, which can latch on to targets and follow them, dodging all sorts of obstacles and capturing everything on high-quality video. Skydio claims that its software can even predict a target’s next move, be that target a pedestrian or a car.

The Skydio X2. Launching later this year, the X2 has range of up to 6 miles and a 100x zoom on its high-definition cameras.

The technology is futuristic, but not exactly brand-new. DJI, which claims yearly revenues above $2 billion, has been making drones with similar autonomous flying features since at least 2016. Some police who’ve used Skydio claim its drones are better at flying in tight, tactical situations—like inside buildings or through a forest—but DJI, which is valued north of $15 billion, has a significant market advantage. Analysts put its U.S. market share at between 70% and 80%, with no other manufacturer above 10% (worldwide numbers are similar).

Skydio’s real advantage might simply be that it is not Chinese. The company bills itself as an all-American alternative to DJI (even if it admits that some of its plastics and metals are made in China). Just before Christmas, the Trump Administration banned American companies exporting to DJI, citing its alleged work supporting oppression of Uyghurs in Xinjiang. This year’s National Defense Authorization Act may ban any federal agencies buying drones made in China, amidst fears DJI could be forced to send sensitive U.S. government or citizens’ data back to Beijing. Local police agencies are also concerned about the threat of Chinese spying—or at least the optics of buying Chinese surveillance drones.

Skydio is happy to play on such fears, routinely taking potshots at its Chinese competitor. After all, no American technology company has ever been hurt by pandering to persistent Sinophobia.

To remove the pilot from the plane wasn’t always Bry’s dream. Go back 20 years, when he was a precocious kid growing up in Denver, Colorado, his dreams were the exact opposite: to become one of the world’s best remote-controlled plane pilots. He got good, taking part and winning national aerobatic competitions. He saw then what small, remotely piloted aircraft could do. “There's a really high degree of artistry that goes into this,” he says.

Matt Donahoe, Skydio cofounder and chief experience officer.

Bry went to MIT, earning a master’s degree in computer science and artificial intelligence, aerospace, aeronautical and astronautical engineering. There he met fellow students and Skydio cofounders Abraham Bachrach and Matt Donahoe. While in college, Bry saw that art could be mastered by a computer. “I was really interested in building something that pushed beyond what the best pilots in the world would be capable of,” he says. In 2012, in a parking lot below MIT labs, they let an albatross-size plane fly itself, dodging pillars and avoiding any collisions in the tight confines of the space. Armed with radar systems used for self-driving cars, a camera, a powerful computer and some autonomy algorithms, it slalomed its way around the space and launched the trio’s entrepreneurial dreams.

Abraham Bachrach, Skydio confounder and CTO.

After MIT, Bry and Bachrach got jobs at Google and set up Project Wing to work on delivery drones, testing some in Australia. Mainstream, large-scale delivery was a stretch: Drones powerful enough to carry packages are still too heavy, noisy and dangerous to work outside a lab environment. What self-flying drones could do without issue was follow and film users as they climbed mountains or ran through forests. They could help out police and search-and-rescue crews, too. And construction companies, oil businesses or any infrastructure provider could also use them to safely inspect difficult-to-reach structures like bridges or offshore rigs.

Skydio was born in 2014. Four years later, the first consumer drone appeared. Rave reviews followed, and all manner of influencers and film crews snapped them up. The private industry and government work came soon after—and not just in America. Lately, Japan has become a hot spot. “Japan is just an infrastructure paradise,” says Bry. “They’ve got bridges and cell towers and power infrastructure up the wazoo. Our drones are being used there every day for all kinds of interesting inspection tasks.”

Though they now have self-flying tech, neither police nor infrastructure companies are firing their drone pilots quite yet. Federal Aviation Administration (FAA) rules only allow small autonomous drones to fly on their own when a pilot can see the drone or has the ability to regain control over it. Night flights currently require a waiver. All this makes something like a pursuit or a rescue operation in which the drone is doing the driving, potentially way out of an officer’s purview, a legally risky move.

To get the FAA to open its arms to more autonomy, Skydio has been lobbying in earnest. It has employed Brendan Groves, a former associate deputy attorney general in Washington, D.C., to find inroads into the government. It seems to be paying off. Last year, Skydio secured waivers allowing cops in Chula Vista, a suburb of San Diego, and workers at the North Carolina Department of Transportation to operate devices where the pilot can’t see the machine. And in January this year, Bry landed a position on the FAA’s Drone Advisory Committee.

But DJI remains the biggest obstacle—and the police still love DJI. “In about 80 hours’ worth of instruction, we take someone who has never even touched a drone before and then issue them a full kit . . . and turn them loose with that, and we're having really good results for a cheap price point,” says Sacramento Police Department lieutenant Mike Hutchins, who has been testing Skydio of late, but not deploying in the field. In Chula Vista, where, in a groundbreaking project, drones are sent as first responders before humans arrive, it’s DJI’s drones that are first on scene, not Skydio’s.

Technically, the Skydio excels in tactical deployments, where it’s deployed in close confines. Last year, in Burlington, Massachusetts, a Skydio came through the woods to help out a SWAT team in a five-hour standoff with two armed suspects holed up in a large suburban house. Using its autonomous flying features, the Skydio was able to get up close to the building by dodging obstacles—a clothesline, a garden umbrella—and peer through the windows. Under surveillance from the drone, the suspects turned themselves in 30 minutes later. “It just flows around, which makes it a lot easier when you're talking about high-risk situations,” says Sage Costa, the officer who was controlling the Skydio.

The S’ydio X2’s Flir thermal camera. Skydio’s new $10,000 to $20,000 X2 drone has a thermal camera with four times the resolution of its Chinese-made rival, DJI’s Mavic 2 Enterprise.

Skydio’s latest version, the X2, addresses some serious shortfalls in its 1 and 2 models, which didn’t work in the dark or the rain. But it is expensive. The DEA just paid $15,000 for an X2, according to government records, and Skydio says the cost can go from $10,000 to $20,000, depending on what accessories and software come on board. DJI’s competitive model costs as little as $3,500. And there’s another catch: The X2’s self-flying features don’t work at night, so a pilot is needed.

If Skydio’s tech alone can’t topple DJI, there are other ways to take out a competitor. Handing Skydios out for free has been one approach. Last spring, they began offering government agencies free Skydios, as long as they provided video and reports for the startup’s marketing and research departments. According to FOIA-obtained emails showing lists of recipients in Skydio’s Emergency Response Program, more than 30 public agencies across the country jumped at the chance, including the Boston and Sacramento police departments and Los Angeles County’s fire-and-rescue unit.

Then there is the made-in-America strategy. In anticipation of the new federal guidelines prohibiting federal agencies from buying from the Chinese, the Pentagon last year released a list of drones that U.S. agencies could purchase, including ones from Skydio, Altavian, Parrot, Teal and Vantage Robotics. It isn’t just federal agencies looking for non-Chinese options. FOIA-obtained emails also show some local police departments are concerned enough that they’re actively seeking to decommission DJI drones, even though that’s not legally required. “Due to future issues with using DJI, we are looking outside DJI and probably any China-manufactured product,” wrote a Port of San Diego officer in December 2019. In Huntington Beach, the surfer’s paradise up the road from Los Angeles, police drone chief Tim Martin tells Forbes he won’t use a DJI when livestreaming or flying around critical infrastructure.

“DJI has essentially been entirely absent from any kind of conversation around how drones could or should be used,” says Bry. “Whether or not you trust the company doesn't really matter. The Chinese government has the right and a demonstrated history of going in and . . . getting whatever data they want.”

In response to the manifold accusations, DJI has been equally combative. “I think the concerns come out of the geopolitics of the moment . . . and are flanked by competitors who see an opportunity to damage our market by spreading rumors and innuendo about security, rather than competing on the merits,” says Brendan Schulman, DJI’s vice president of policy and legal affairs.

DJI stresses that users can simply put their DJI drone into a mode that keeps them offline, so data couldn’t physically be sent anywhere. It notes its drones have also been tested by independent security companies for any sign of a backdoor that could be used as a way for the Chinese or another government to acquire data. None have been found.

That Skydio is contracting with the military and about to start work with the CBP will likely turn some heads. In some corners of Silicon Valley, engineers balk at the idea of working with such agencies. Thousands of Google staff, for instance, called on their employer to cease working with the Pentagon and immigration agencies in 2020. But Bry says Silicon Valley companies shouldn’t shy away from working on government projects. He won’t comment directly on any work with the CBP, but adds: “It’s unfortunate that some of these agencies are as polarized as they are . . . I think that an organization like Customs and Border Patrol performs an absolutely critical function for society that we all depend on,” Bry says, pointing to corporate promises that Skydio will never sell to a repressive regime or put weapons on its drones.

“We understand that our drones are going to be used in potentially polarizing and charged situations,” Bry says. “But I think that steering away from that just because it's controversial or polarizing would be the wrong thing to do.”