Taser maker Axon acquires air defense startup Dedrone

A public safety technology company Axon announced Monday that it is acquiring drone security startup Dedrone.

Dedrone, which serves military, government and commercial customers, from airports to stadiums and major events, has become a major player in what is known as intelligent air security. Its technology already covers half the US population in 40 cities, 30 airports, 50 stadiums and 50 correctional facilities. His work spans 36 states, nine US federal agencies and more than 35 law enforcement agencies.

Founded in 2014, Dedrone has been venture-funded with a total of $127 million from existing investors, including Axon, which led a funding round with venture capital firms in July 2022 and had a seat on Dedrone’s board.

The company was in 23rd place last year CNBC Disruptor 50 list.

Terms of the deal, which is expected to close in the second half of 2024, were not disclosed.

Axon, which is best known for the Taser, also offers body cameras, dash cams and a cloud-based digital evidence management platform — for assets including video from Axon body cameras. Its clients include international, federal, state and local law enforcement first responders, fire departments, correctional facilities and the judicial sector, in addition to commercial businesses.

Axon CEO Rick Smith, who founded the public safety company three decades ago, told CNBC’s Morgan Brennan in an exclusive interview that what Dedrone has done in protecting public airspace aligns with his company’s mission. “And you can see what’s going on in the world. Drones hold great promise, but also great danger. So by joining forces, we’re able to combine our scale with Dedrone’s ingenuity and innovation so we can protect more lives in more places,” said Smith.

Axon, which has a market valuation of over $24 billion, has seen its stock rise from just under $50 in 2019 to over $300 today. Axon raised its full-year revenue guidance in your latest earningsreleased at the same time as the acquisition was announced Monday afternoon, to nearly $2 billion, after a first quarter that saw sales rise 34%.

Aaditya Devarakonda, previously a technology investment banker and advisor to Dedrone and who has been Dedrone’s CEO since 2020, cited the company’s growing footprint in industries from government to utilities, critical infrastructure, event venues, airports and correctional facilities as suitable for Axon’s ecosystem of connected devices and software.

“We are located in 800 different locations,” Devarakonda told Brennan. “We keep the bad drones out… Just open any newspaper and turn on any TV channel. Look at what is happening in Ukraine. See what’s happening in the Middle East. Drones have forever changed modern warfare, public safety, and homeland security. … Look, every airport needs this, every prison needs this.”

Dedron systems operate in Ukraine.

Dedrone’s flagship product, the Dedrone Tracker, provided security for the 2022 FIFA World Cup in Qatar, protecting 900 square kilometers of airspace and 44 key sites. It has also worked with the Formula 1 Grand Prix. The tracker can detect around 200 drone models from 65 manufacturers, trigger alarms and analyze incident data to create forensic reports.

It introduced a first-responder drone that was field-tested by police departments and debuted DedroneTactical, a portable radar setup with AI-driven detection equipment. Chief among its new products is the DedroneCityWide, which acts as an air traffic control system for drones and was recognized by Time as the best invention of 2023.

This past year, Dedrone technology was selected as the only counter-drone approved for counterterrorism use by the Department of Homeland Security.

Smith estimates that Dedrone will increase Axon’s total available market by over 20%. In a world where drones that consumers can primarily buy at Best Buy or online today can, with minor repurposing and planning, be transformed from consumer toys into “things that can be pretty dangerous,” Smith said, Dedrone is in a space where the public will need help understanding both the risks and the “huge growth area” for the public safety sector to have its own drones.

Today, dropping a drone on the scene long before a police car can get there through traffic means an officer is standing on the roof. “You’re looking off into the distance trying to see a drone. “We know that a superhuman array of sensors can track drones and keep the airspace much safer than a person standing on a roof,” Smith said.