Dual-use tech: the Skydio example

Skydio, Inc. is a Silicon Valley-based tech start-up which markets itself as “America’s leading drone manufacturer”. The company primarily develops and sells drones and related technologies – including docks, platforms, robotics and AI – and claimed by 2024 it had delivered “over 45,000 dual-use drones to more than 2,000 customers” since its foundation in 2014.

Skydio’s sales blur the lines between the civilian and defence sectors. It started out by selling small, portable Unmanned Aerial Vehicles (UAVs) to individual consumers. Then in 2022, it was awarded its first US Army contract, a $100m five-year deal by the Department of Defense (DOD) for its Short-Range Reconnaissance (SRR) programme. It was under this scheme that Skydio developed its current star drone, the X10D. By 2024, over 50% of its scheduled bookings were coming from defence customers worldwide.

So promising was its breakthrough into the world of military contracts that in August 2023 the company announced it was exiting the consumer market to work exclusively for businesses and governments, including defence and law enforcement. The reportedly slow and testing nature of the defence procurement process makes it less viable for start-ups whose venture capital funders are generally looking for large and fast returns, creating the impetus for firms like Skydio to establish themselves in other sectors first.

While its products are no longer available to the average consumer, the company has far from abandoned the civilian market. Rather, it applied lessons learnt from the battlefield to produce more advanced UAVs. It then worked to embed those products across US police forces by initially giving away drones for free.

With 28 investors in total since its founding, the company has gone through seven rounds of funding so far. It’s November 2024 fundraising round raised $170m, bringing its total valuation to $2.2bn.

Dual-use products

Skydio openly describes its technologies as dual-use. Its newest drones are the X10, aimed at non-military buyers, including law enforcement and civil engineering firms; and its later variant, the X10D, which is marketed internationally to military customers for the purposes of intelligence, surveillance and reconnaissance (ISR) missions, among other applications. The two devices share software, hardware and attachments, and at times appear to be referred to interchangeably. Besides these flagship products, the company sells several other small, AI-powered drones: Skydio 2+, which is promoted for construction and civil engineering, law enforcement and search and rescue; and the X2D, which is sold principally to the military market.

Both X10 drones are fitted with Teledyne FLIR Boson+ thermal cameras, can track moving objects such as a person or vehicle, and can create 3D scans of infrastructure, objects and terrain (known as digital twins). The company says its AI technology ensures the drones can “see, understand and react in real time”, making predictions and decisions on its own. This computational power is made possible by the NVIDIA Jetson Orin GPU device onboard.

Various payloads (i.e. attachments) are available for the X10 and X10D, including speakers, spotlights, parachutes, droppers, chemical detection tools, and diversionary devices; plus payloads for data mapping and operating autonomously in the dark. A US army version of the X2D has seen it fitted with grenades, which the military has experimented with since at least February 2023. The modular design of Skydio’s drones is conducive to collaborations and the development of bespoke attachments from other companies, such as L3Harris and Trimble.

Skydio describes the X10D as “an offline variant” in that it does not require a network to function at all. This makes it resilient to Electronic Warfare (EW) on the battlefield, a development triggered by the extensive use of signal jamming in the war in Ukraine, where a 2023 estimate states that 10,000 drones are lost to the practice each month.

Being dual use, Skydio’s products are sold to a wide range of civil and defence customers, including every branch of the US military. Besides the US army, Skydio reportedly supplies two dozen US-allied armed forces, including the UK Ministry of Defence, the New Zealand army, and the Royal Canadian Navy. In early 2025, a $19m contract to supply hundreds of X10D drones to Spain’s Ministry of Defence was agreed in partnership with the Paukner Group, a Spanish defence and security distribution firm.

The company said in 2024 that it donated hundreds of drones to Ukraine in the early stages of the conflict and subsequently supplied at least a thousand dual-use UAVs to the country, largely paid for by the US government. The battlefields of Ukraine became a testing ground for Skydio technology, and the business launched the X10 – a drone focused on the civilian market - off the back of it, stating that the drone “embodies the improvements from our work in Ukraine and elsewhere”.

Skydio is open about its political aims – which neatly dovetail with market opportunities – claiming that “Skydio employees are proud to… further the interests of the United States and our allies… such as Israel and Ukraine.” In the immediate aftermath of the October 7th 2023 attack in Israel, Skydio received orders from the Israeli military, and within weeks the company had sent over a hundred drones, with more promised.

Besides the considerable number of military contracts, the other major user of Skydio drones is the police. At the time of writing, the company’s products are employed by over 700 “Public Safety” agencies across the US. Their broad uptake by police forces has been aided by giving away a significant number of drones to these agencies for free.

Skydio is going to lengths to market the X10 as “Drone as First Responder” (DFR). DFR programmes send strategically-placed drones ahead of police officers in order to livestream a situation and gather evidence. The idea has caught on among police forces across the US, in part because drones are far cheaper to operate than piloted aircraft. For example, the NYPD, which uses the Skydio X10, now has over 100 drones following the announcement of its DFR programme in 2024.

However, one barrier to the wholescale adoption of DFR is the fact that most police forces do not have the permission to use them beyond their visual line of sight (BVLOS). A 2023 ACLU (American Civil Liberties Union) report on the growth in DFR emphasises that an increasing number of police forces are applying for an exemption to the ban for this purpose. To ease the process along, Skydio has produced a guide on how to apply for the waiver. The company also promotes automated drone dispatch following 911 calls or automated license plate recognition (ALPR) alerts, while the drone’s ability to autonomously lock on to a particular person or vehicle and track it (the so-called “follow-me” function) would be particularly attractive to the police. In addition, Skydio has partnered with body-worn camera manufacturer, Axon, to deploy drones which are launched on the push of a button through police officers’ bodycams. As others have pointed out, DFR programmes can easily lead to the over-policing of communities which are already subjected to heavy surveillance, and the broad range of payloads and modifications available to drones such as the X10 significantly increase the prospects of mission creep.

One such example of the broad application of Skydio technology is its adoption by Yale University to surveil students protesting Israel’s bombardment of Gaza. The institution is reportedly in possession of three military-grade UAVs, one of which is a Skydio device. The Yale Police Department has used footage from these drones to monitor each protest and, even more chillingly, to assemble dossiers on particular students.

Partnerships & programmes

Skydio has been included in the US Defense Innovation Unit’s (DIU) Blue UAS (unmanned aircraft system) list of DOD-approved drones since the list’s creation in 2020. A year later, Skydio was chosen to develop and supply drones for the US Army’s Short Range Reconnaissance (SRR) programme, worth $100m – although the contract was subsequently taken over by Red Cat’s subsidiary, Teal, in 2024.

Skydio is among the companies selected to deliver to the Pentagon’s Replicator programme, an initiative designed to enable the rapid development and funding of small, low-cost and effectively expendable drones by the commercial sector for the DOD. Reflecting the changing nature of warfare, tech start-ups like Skydio are particularly prominent in the programme, with large, traditional defence contractors representing only around 25% of Replicator companies.

Skydio is also working on Research and Development (R&D) in close collaboration with governments overseas. In 2024, the firm signed an agreement with Singapore’s Defence Science and Technology Agency (DSTA) to collaborate on autonomous drone research for defence and security purposes.

That same year, Skydio joined the India-U.S. Defense Acceleration Ecosystem (INDUS-X), a partnership between the US and India’s defence departments. This initiative has seen the company team up with prominent Indian weapons and drone manufacturer Aeroarc to supply UAVs, under the name Trinetra, to defence agencies in the Indo-Pacific region. The project includes plans to expand the partnership into civilian sectors, with Skydio’s chief revenue officer, Callan Carpenter trumpeting that, “[w]e can … provide the same kind of overwatch and security that we provide for say a military base … for overwatch at a construction site.” These “Indianised” versions (further developed to meet local need) of the US drone are reportedly being used to increase surveillance in Jammu and Kashmir, where human rights organisations cite continued repression and state violence.

Other critical issues

Skydio has been accused of aggressive lobbying against the sale of Chinese-made drones in the US, and by 2024, had dramatically increased its US lobbying budget to $680K, up from $10K in 2019.

One of its corporate targets appears to be its primary competitor, DJI Technologies, a Chinese company estimated to control over 90% of the world’s consumer drone market. The Ukrainian military now depends largely on off-the-shelf Chinese drones and parts, reporting that US-made drones tend to be “expensive, glitchy and hard to repair”. Skydio’s anticompetitive agenda succeeded when in September 2024, a bill banning DJI from selling drones – the Countering CCP Drones Act -  was passed by Congress. This bill was tabled by congresswoman Elise Stefanik, who had previously worked as national security advisor with Skydio’s then Director of Federal Policy, Joe Bartlett. The relationship is mutually beneficial, with Skydio investor and seed-funder venture capital firm Andreessen Horowitz donating to Stefanik in 2023-4.

Ben Horowitz, co-founder and partner at Andreessen Horowitz – has donated $6.3m to the Las Vegas Metropolitan Police Department’s (LVMPD) police foundation specifically to buy Skydio drones and surveillance tech from another of Horowitz’ portfolio companies. While Horowitz boasted about his largesse on his blog (once the story had been exposed), his donation effectively exploited a loophole enabling his close relationship with Skydio to influence police practice. Coming via a gift to its police foundation, the LVMPD acquired the drones without the scrutiny and accountability that comes with the standard procurement process, including bidding against competitors for contracts paid for by local government approved budgets. Since this tactic of giving away freebies to public institutions (which has also been used by surveillance giant, Palantir) reportedly facilitates Skydio to win future public contracts (and boost Andreesen Horowitz’s funds).

People & politics

Skydio was founded by three friends and former MIT students, Adam Bry, Abe Bachrach and Matt Donahoe. Bry and Bachrach later went on to work together on Google’s secretive drone program, Project Wing, before the trio decided to launch their own company.

Bry has close ties within the US defence sector: he provided testimony to at least one government hearing on “Innovation in U.S. Aerospace”; and in January 2021, was appointed to the US government’s Drone Advisory Committee (DAC) by Elaine Chao, former Secretary of Transportation during Trump’s first presidency. A year after Bry’s appointment to the committee, Skydio’s selection for the Short Range Reconnaissance (SRR) programme was confirmed. Chao is currently on the board of electric vehicle firm, ChargePoint along with Michael Linse, the founder and managing director of Skydio investor, Linse Capital.

Skydio’s staff and security advisory team boast decades of military experience, as well as hefty US government and defence industry connections. Former US Air Force fighter pilot and commander, William Mark Valentine, took up the role of President of Global Government with Skydio in April 2023, and is now its Global Head of National Security Strategy. Valentine also worked as a senior military advisor to the Federal Emergency Management Agency (FEMA) from 2011-2013, an organisation that provides grants to purchase drones for public safety and policing. By June 2023, just two months after Valentine joined Skydio, the company’s X2 was one of FEMA’s approved models of UAV.

The company’s connections reach further into law enforcement. Ex-police chief, Phil Gonshak, joined Skydio in early 2025 as Director of Strategic Initiatives. Whilst at the Denver PD prior to his departure for Skydio, he initiated the use of Drones as First Responders. He now promises to “leverage [his] leadership experience … to help the Skydio team develop the best possible DFR solution for officers on the front lines”.

Who is behind the brand?

Besides Andreessen Horowitz, Skydio has received the backing of tech investor Linse Capital; Axon (bodycam manufacturer and the company behind the taser); and Japanese telecoms operator, KDDI. It has also received funding from NVIDIA; UCLA Venture Capital Fund; Next47 (an investment arm of Siemens); In-Q-Tel, a venture capital firm founded by the CIA; and the Walton family, the dynasty behind Walmart.