After a decade of fast growth and high hopes, the commercial drone industry is facing one of its toughest periods yet. Drone industry funding in 2025 has hit a new low. Coinciding with broader economic concerns as of late — including tariffs (which are widely seen as likely to raise prices) — should the drone industry panic?

As President Donald Trump hits the 100-day mark in office this week (that’s Wednesday), here’s a look at the economic outlook for drones.

The tl,dr; many American drone companies, including American drone companies like Kansas-based AgEagle Aerial Systems, are betting on short-term pain but expecting longer term benefit. Other drone pilots who rely on cheap, Chinese-made drones aren’t optimistic. After all, DJI has already said it would raise prices.

Investment in drones had been falling long before the Trump Administration

Before you panic about Trump’s recent moves on tariffs — as well as other policies like income taxes and the corporate tax rate — take a slightly longer-term view.

New data from Drone Industry Insights released in April 2025 shows that investment in drone companies has been dropped sharply for years now. Drone industry investments peaked in 2021 at 3.67 billion. But they’ve been steadily declining since then.

Drone company investments went from $3.04 billion in 2022 to just $820 million in 2024, a staggering 73% decline over two years. Things really stalled in 2023 and continue to fall. Alas, drone industry funding in 2025 isn’t projected to look any better. Check out this chart from Drone Industry Insights:

The trends suggest that the drone industry is deep in what tech analysts call the “Trough of Disillusionment,” a phase where early excitement fades, and only the strongest companies survive. For small businesses, hobby pilots and even everyday consumers, this moment could reshape the future of drones in a big way.

Small businesses fight to survive — or pivot

For small drone companies, this funding slump is a survival game. With less venture capital available and higher interest rates making loans more expensive, 2025 could be a year of tough choices: merge, pivot, or close up shop.

We’re already seeing signs of consolidation, with mergers and acquisitions (M&As) picking up speed. Companies that once chased consumer drone markets are pivoting toward industrial applications like inspections, mapping or agriculture — or even shifting to defense contracts.

Many once-promising companies have failed. Sony’s Airpeak S1 drone is no more. A number of drone delivery companies including Aerit and SkyDrop (formerly Flirtey) have called it quits.

Meanwhile, many companies have blended to become one. For example, Robinson Helicopter Company acquired Ascent AeroSystems, make of the Ascent Spirit drone.

It’s a critical moment for entrepreneurs: adapt to find niche, high-value markets or risk being swallowed up in the shakeout.

Hobby pilots may feel the pinch, too

Although commercial funding and hobby flying may seem unrelated, they’re more connected than you think.

Fewer startups mean fewer innovative products aimed at hobbyists. Most notably, new tariffs introduced in early 2025 could drive up the cost of drones — especially those imported from China, which dominate the consumer market.

As the U.S. government debates tariffs, hobby pilots could face higher prices and fewer options, especially for prosumer and FPV (first-person view) drones that rely heavily on foreign components.

The future of drones is still bright — but it’s changing

While the funding drought looks grim, it also signals a maturing industry. Hype is giving way to practical, real-world adoption.

According to Drone Industry Insights, we’re still in the “Early Adopters” phase — meaning the technology is proven, but mass-market acceptance hasn’t yet arrived. That’s actually good news in DII’s eyes. After all, their data suggested that drone adoption is far from saturated. The “Early Majority” phase, where drones become truly mainstream for business and recreation, still lies ahead, DII says.

At the same time, new opportunities are rising in defense and public safety.

“The situations in Ukraine and Israel have seen huge investments in military equipment, with (alternate) drones at the forefront,” according to DII. “This development brings new players to the market – not just traditional defense companies – but civil companies Bosch, Continental, or Motorola, that offer mass production capability and national supply chains for both commercial and military drones.”

How small businesses and pilots can navigate 2025 and beyond

Here’s what small drone businesses, entrepreneurs, and pilots can do to thrive in this moment:

• Diversify your skills: Master BVLOS (beyond visual line of sight) operations, mapping software or public safety use cases. Part 108 rules are supposedly on the horizon, which should make BVLOS easier. Meanwhile, it’s easier than ever to learn advanced drone skills like mapping with drones through online courses.
• Advocate for better regulations: And to echo the Part 108 point, the FAA’s long-awaited BVLOS rule could unlock major new markets. Nothing is set in stone now, so get involved now to shape fair policies.
• Watch the defense space: Technologies developed for military drones could soon reshape the commercial sector, offering new tools for inspection, delivery and disaster response.

Should you panic about the lack of drone industry funding in 2025?

The drone industry is entering a tough but exciting phase.

Yes, drone industry funding in 2025 is tight. Yes, tariffs and regulations are creating headwinds. But the long-term trajectory of drones is still upward — from smarter inspection drones to spectacular light shows and life-saving delivery missions. The companies and pilots who survive it will be the ones who define the next decade of flight.

By the way, for more economic insights, I highly recommend you follow the folks over at Drone Industry Insights.

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