FAQ: Why So Many Drone Investments Failed
Why have so many drone startups collapsed?
Most didn’t properly test their ideas against real-world demands. They underestimated technical, regulatory, and operational hurdles—especially across Australia’s tough and varied terrain.
Are drone investments still risky in 2025?
Yes. Even with newer technology, drone investment risks remain high without aviation knowledge, CASA certification, and hands-on industry experience—core strengths Two70 is built on.
What are the biggest challenges facing the drone industry?
Strict CASA regulations, technical limits, Australia’s harsh environment, and a growing but competitive market that demands more than just flying a drone—it demands results.
Which sectors have had the most drone investment failures?
Agriculture, delivery services, and mass surveillance projects have seen many drone startup collapses, while specialized services like Two70’s aerial surveys have continued to grow.
How does Two70 avoid the common pitfalls?
By combining real aviation expertise, CASA certification, practical tech choices, and a focus on tangible results for our clients—not hype.
What professional drone services does Two70 provide?
As a CASA-certified operator (ReOC), Two70 offers aerial surveying, high-res mapping, 3D modelling, LiDAR scanning, asset inspection, and environmental monitoring tailored to Australian industries.
Why Drone Investments Struggle: Two70’s Insights
Drone technology was once hailed as the next big thing, promising to reshape everything from farming to freight. Billions were invested. Expectations skyrocketed.
But many drone ventures didn’t just stall—they crashed.
At Two70, we’ve been part of the drone industry’s real growth story—not the hype. Founded by a G1-rated helicopter flight instructor with deep IT experience, Two70 has delivered reliable aerial surveys across Australia since 2022.
Here’s a look at why so many drone investments failed—and how Two70 succeeds where others couldn’t.
Dreams vs. Reality: The Market Misread
In the early days, the sky was the limit.
Investors imagined drones buzzing over every farm, mine, and suburb. Forecasts talked of billion-dollar industries sprouting almost overnight.
But Australia’s real-world conditions, vast distances, rugged environments, complex logistics, demanded more than enthusiasm. They demanded proof: real return on investment, not just slick demos.
Many drone companies couldn’t meet these real-world needs. Meanwhile, Two70 focused on reliable aerial surveys that solve real problems for businesses on the ground.
“In aviation, assumptions cost lives. In business, they cost companies,” says Two70’s founder. “That’s why we built Two70 on proven use-cases, not hype.”
The Australian drone market has its own unique characteristics that many investors and entrepreneurs failed to appreciate fully. Our continent’s sheer scale presents logistical challenges that simply don’t exist in more densely populated regions. What works in Europe or North America often flounders in Australia’s vast expanses.
For instance, many drone investment pitfalls stemmed from assuming that operational models successful in compact urban environments would translate effortlessly to the Australian context. This fundamental misunderstanding led to unrealistic business plans, inadequate equipment choices, and ultimately, drone business failure reasons that could have been avoided with proper local expertise.
The drone investment risks weren’t just about technology—they were about context. Operating in the challenging Australian landscape requires deep knowledge of not just flying machines, but of the environment itself. From the humidity of Far North Queensland to the blistering heat of the Pilbara, each region demands specific operational approaches that many startups simply weren’t prepared for.
Two70 approached this reality differently. Rather than chasing multiple application domains simultaneously, we concentrated on aerial surveying—a field with clear value propositions and measurable outcomes. This focused approach allowed us to build genuine expertise rather than spreading ourselves thin across multiple sectors without mastering any.
Navigating Regulations: Why CASA Matters
Australia’s Civil Aviation Safety Authority (CASA) enforces some of the toughest drone regulations in the world.
And rightly so, safety in the skies is non-negotiable.
Yet many drone startups failed to fully grasp:
The licensing needed: RePLs for pilots, ReOC for operations.
Operating limits: line of sight, controlled airspace rules.
Data privacy laws and environmental considerations.
Compliance takes time, money, and expertise, things many startups didn’t plan for.
Many ran out of runway before they ever took off.
At Two70, CASA certification is not just a box ticked. It’s part of our DNA.
With a team trained in real-world aviation, we deliver services fully within CASA’s rules, giving clients confidence that every flight is safe, legal, and professional.
Drone industry challenges related to regulation have been particularly steep in Australia. Unlike more permissive regulatory environments elsewhere, CASA requires commercial drone operators to meet stringent standards—and for good reason. Our airspace is busy with commercial, private, and emergency aircraft, often operating in remote areas where collision risks must be carefully managed.
The regulatory landscape continues to evolve, with CASA regularly updating requirements to address emerging technologies and operational approaches. This creates a moving target that many drone startups underestimated in their business plans. What was compliant yesterday might not be tomorrow, requiring constant vigilance and adaptation.
Some specific regulatory hurdles that contributed to drone industry investment failure include:
- Complex operation manuals: Developing comprehensive operations manuals that satisfy CASA requirements demands aviation expertise many tech-focused startups lacked.
- Insurance requirements: Adequate liability coverage for commercial drone operations represents significant overhead that many startups didn’t properly budget for.
- Training obligations: Ongoing pilot certification and training creates recurring costs that weren’t factored into many business models.
- Operational limitations: Restrictions on beyond visual line of sight (BVLOS) operations severely constrained many proposed business models, particularly in delivery and infrastructure inspection.
For Two70, our aviation background meant we approached these regulations as expected parameters rather than obstacles. Our operations were designed from day one to function effectively within CASA’s framework, rather than hoping for regulatory changes that might never materialise.
Facing Australia’s Technical Realities
Australia’s conditions are brutally honest. Technology that works in city parks might fail in the Outback.
Here’s what caught many drone companies off guard:
Battery Life
Most drones still can’t fly more than 20–40 minutes per charge. Covering broad areas efficiently demands careful planning and the right gear—something Two70 builds into every project.
The battery challenge isn’t just about duration—it’s about performance consistency across Australia’s extreme temperature ranges. In the northern regions, temperatures routinely exceed 40°C, significantly reducing battery efficiency and shortening flight times. Similarly, operations in Tasmania’s cooler climate present different power management challenges.
Two70 addresses these issues through strategic planning. We implement precision flight paths that maximize coverage while minimizing energy consumption. Our operations incorporate multiple battery sets and efficient handover procedures, ensuring continuous operation without sacrificing data quality. This level of operational detail is rarely considered in the enthusiastic projections of many drone investments.
Weather Extremes
Dust storms, tropical rain, brutal heat—Australian weather isn’t forgiving. Two70 operates with drones specifically chosen for resilience in these harsh environments.
The Pilbara’s red dust infiltrates electronics. The tropical north’s humidity corrodes components. Coastal operations face strong, unpredictable winds. Each environment demands specific equipment modifications and operational protocols.
For example, in mining regions, fine particulate matter represents an invisible threat to drone motors and electronics. Two70 implements specialised maintenance protocols and equipment selections that account for these conditions. We’ve learned that standard commercial drones—even “professional” models—often require significant modifications to perform reliably in these environments.
Many failed drone companies underestimated how these environmental factors would impact their equipment reliability and maintenance costs. A drone that requires servicing after every few flights quickly becomes economically unviable.
Remote Operations
Forget easy mobile data. Much of Australia has zero coverage. Two70’s systems are designed for offline, remote data capture without sacrificing accuracy.
This connectivity challenge extends beyond just data transmission. Many drone systems rely on constant communication with operators or central servers for navigation, mission planning, and safety systems. When that connection fails—as it inevitably does in remote Australia—inadequately designed systems become useless or even dangerous.
Two70 implements robust autonomous capabilities and redundant systems that don’t depend on continuous connectivity. Our equipment is selected and configured specifically for Australian conditions, with offline processing capabilities built into our workflow from the outset.
Payload and Range
Not every drone is fit for every task. Two70 matches aircraft to project needs, ensuring the right payload, endurance, and accuracy for each mission.
The payload equation isn’t simple. Heavier sensors yield better data but reduce flight time. Longer-range drones often sacrifice payload capacity. These tradeoffs demand careful consideration of each project’s specific requirements.
In the resources sector, for instance, highly accurate LiDAR data might be essential, requiring heavier sensors. In agricultural applications, multispectral imaging with lighter sensors might be more appropriate. Two70’s aviation background helps us make these assessments accurately, rather than applying a one-size-fits-all approach that inevitably disappoints clients.
While many newcomers were caught off-guard, Two70 understood the environment from the start—and engineered services that work here.
Lessons from Drone Startups That Collapsed
AirWare (USA):
Raised over $100M trying to build hardware-software systems but failed under complexity pressure.
Though based in the US, AirWare’s collapse offers valuable lessons for the Australian market. The company attempted to create comprehensive, all-in-one solutions before fully understanding the diverse operational requirements of different industries. This approach created unsustainable development costs and ultimately disconnected their offerings from real customer needs.
The parallel in Australia has been particularly evident in startups attempting to service multiple industries simultaneously without developing deep expertise in any single one. Creating effective solutions for agriculture differs substantially from developing systems for mining or infrastructure inspection. Each industry has unique requirements that demand specialised knowledge and equipment configurations.
- Ignoring regulation is fatal.
- Overpromising technology breaks trust.
- Underestimating real-world conditions kills momentum.
- Two70 learned from these failures—and avoided the same mistakes.
The Gap Between Hype and Reality
The drone industry’s funding history is a textbook case of premature excitement:
- Early demos wowed investors.
- Regulatory and technical barriers were downplayed.
- Revenue took longer than planned.
- Cash dried up. Companies folded.
The pattern of drone market hype followed by investment collapse has been particularly pronounced in Australia. International investment trends drove local funding without sufficient adaptation to local conditions. Investors often applied metrics and expectations from software startups to hardware-intensive drone businesses, creating unrealistic pressure for rapid scaling.
The typical pattern saw initial funding rounds based on promising technology demonstrations, followed by growing investor impatience when commercialisation proved more challenging than anticipated. As runway shortened, many companies pivoted desperately, further diluting their focus and expertise. This cycle of hype, disappointment, pivot, and eventual failure has been repeated across numerous drone ventures.
Several factors contributed to this gap between expectations and reality:
- Overestimated market readiness: Many industries remained hesitant to integrate drone technologies into their workflows, requiring more education and proof than anticipated.
- Underestimated infrastructure needs: Successful drone operations require more than just aircraft—they need maintenance facilities, trained personnel, data processing capabilities, and robust logistics.
- Misunderstood customer priorities: Many drone startups focused on technical capabilities rather than solving specific customer problems, creating solutions in search of problems.
- Unrealistic timelines: The reality of hardware development cycles, regulatory approvals, and market education created much longer paths to profitability than many business plans assumed.
Two70 took a fundamentally different approach by focusing on sustainable operations rather than explosive growth. We recognised that in the drone industry, reputation and reliability would ultimately matter more than rapid expansion. This patient approach has allowed us to build a solid foundation while many venture-backed competitors have disappeared.
Why Two70 Delivers When Others Don’t
Here’s why Two70 continues to grow while others folded:
Aviation First: Founded by a G1-rated helicopter flight instructor.
This aviation heritage informs every aspect of our operations. Unlike tech-first companies that approached drones as flying computers, we understand them as aircraft first and foremost. This perspective fundamentally changes how we assess risks, plan operations, and maintain equipment.
Our founder’s aviation background brings decades of experience in weather assessment, flight planning, and operational safety. These skills translate directly to professional drone operations, creating a level of operational maturity that tech-focused startups often lack. When conditions change mid-operation—as they invariably do in Australia, this aviation experience enables quick, safe decision-making.
This aviation mindset also helps us communicate effectively with clients. We speak the language of aviation when dealing with regulators and can translate complex technical details into clear, actionable information for clients from non-aviation backgrounds.
CASA Certified: Full ReOC certification—no shortcuts.
Our CASA ReOC (Remotely Piloted Aircraft Operator’s Certificate) represents more than just compliance—it embodies our commitment to professional standards. We’ve invested in developing comprehensive operations manuals, training programs, and safety systems that exceed minimum requirements.
This approach not only enables us to operate legally but also provides clients with confidence that their projects are being conducted to the highest professional standards. In an industry where regulatory violations can lead to significant penalties and project delays, this peace of mind represents substantial value.
Our CASA certification also enables us to operate in controlled airspace and other restricted areas that remain off-limits to less qualified operators. This expanded operational envelope allows us to take on projects that other drone service providers simply cannot access.
Australian-Proof Operations: Built for dust, distance, and real-world conditions.
Two70’s equipment selection and operational procedures are specifically designed for Australian conditions. From thermal management systems for hot weather operations to dust mitigation for outback surveys, our entire approach is tailored to Australia’s unique challenges.
We’ve learned through experience what equipment configurations work reliably in different Australian environments. This knowledge isn’t theoretical—it’s built on hundreds of flight hours across diverse conditions. When we deploy to a site, we bring redundant systems and maintenance capabilities that ensure continuous operations even when things don’t go according to plan.
Our field kits include not just spare parts but entire backup systems. We’ve developed comprehensive pre-flight protocols specifically for Australian conditions, identifying potential issues before they become operational problems. This attention to detail significantly reduces the downtime that plagues less experienced operators.
Client-Centric Approach: Real projects. Real data. Real results.
Two70 measures success not by flights completed but by client outcomes achieved. We begin every project by clearly understanding what decisions our data will inform, then design our collection and processing workflows accordingly. This outcome-focused approach ensures that clients receive not just data but actionable intelligence.
We’re also realistic about what drone technology can and cannot do. Rather than overpromising capabilities, we provide honest assessments of what’s achievable within technical and regulatory constraints. This transparency has earned us lasting client relationships based on trust rather than hype.
Our deliverables go beyond raw data to include analysis and insights that directly address client needs. For mining clients, this might mean volumetric calculations with verified accuracy. For environmental monitoring, it could include change detection analysis that highlights areas of concern. This value-added approach distinguishes us from operators who simply collect and deliver raw imagery.
If you’re looking for aerial survey solutions that don’t just sound good—but work—you’re already thinking Two70.
Explore Two70’s Professional Services
We offer:
High-Resolution Aerial Imagery
- Sub-centimetre resolution orthomosaics
- Thermal imaging for heat detection
- Multispectral analysis for vegetation health
2D Mapping & Orthophotos
- Georeferenced precision maps
- Time-series comparisons
- Measurement-capable outputs
3D Modelling & Digital Twins
- Photogrammetry-based models
- Point cloud generation
- BIM-compatible outputs
LiDAR Surveys
- Vegetation penetration capabilities
- Highly accurate terrain models
- Structure and asset mapping
Asset Inspections
- Infrastructure assessment
- Thermal analysis for maintenance planning
- Detailed visual documentation
Environmental Monitoring
- Vegetation health analysis
- Erosion tracking
- Rehabilitation monitoring
All backed by professional aviation knowledge and full CASA compliance.
Conclusion: Invest in Reliability with Two70
The drone sector still holds enormous potential, but only for those who match vision with discipline, expertise, and respect for the Australian landscape.
At Two70, we don’t chase hype.
We deliver results.
If you want aerial surveys and data you can trust, backed by real aviation know-how, contact Two70 today.
