Take off in the drone market: the first months of an AI-startup in Spain

Alyona Kovaleva
Impulse Media Contributor
One of the Artial founders Egor Folley gave insights about his AI-startup for autonomous drones software. Started in the US and recently incorporated in Barcelona, Spain.

The drone market is growing all over the world, but the European Union is still lagging behind the leaders - the US and China. However, in the EU, according to the Artial founders, there is a great demand for the use of drones in the private and public sectors as well as optimal support from the government.

Chinese companies are taking the wing

According to Drone Industry Insights, there were 199 investment deals involving drone manufacturing companies in 2021 worth $7 billion. Market analysts expect the global Unmanned Aerial Vehicle (UAV) market to reach $30 billion by the end of 2022. Within ten years, it is expected to grow by an average of 25 %.

It includes all applications: children's toys, professional photography and TV sectors, aeronautics fans, drones and, of course, the military.

China accounts for more than 70 % of the global civilian drone market, with about 70,000 firms operating in the country that are in one way or another connected with the UAV industry. Not surprisingly, it is the Chinese DJI that owns up to 80 % of the world market. The company started back in 2006 selling drones for $6,000, and now it is her to thank for the affordable price of drones for the wider audience.

In the EU, the largest manufacturer is the French Parrot. The company was founded back in 1994, but since 2017 it has specialized exclusively in drones. She is ranked second largest in the world by UAV coach.

Skydio leads the way in the US. Founded by MIT alumni who worked on Google's drone project, it's already worth a billion dollars. But in the ranking, it still lets other manufacturers from different countries go.

The first commercial patent for a “teleautomaton”—a vehicles remote control device—was obtained by Nicola Tesla in 1898.

Where the drone is useful
In the private sector, drones are in most demand in energy (14%), construction (12%) and agriculture (9%).

According to studies, 69% of market participants use UAVs primarily for anomalies and malfunctioning inspection of the infrastructure; mapping and aerial photography. Drones do all this faster, better and safer than humans or helicopters.

Global drone market by industry. Source

Research suggests that the use of drones is expanding from year to year. For example, here are a few areas where UAVs are being actively and sometimes unexpectedly used.
Transport. Postal and courier activities. Delivery of commercial goods. Passenger traffic is expected to start in the future. For example, Volkswagen recently presented a prototype of an autonomous passenger drone.
Health and humanitarian purposes. Transportation of blood and defibrillators, mapping of habitats of disease vectors. During the pandemic, more than eighteen countries have deployed drones for delivery and transportation during the pandemic, according to UNICEF. With the help of a drone, rescuers delivered a life jacket to a boy drowning in the sea in Valencia.
Ecology and utility services. Filming fauna, forests monitoring for forest fires, observing animals, water supply and sewerage. In Spain, drones are monitoring sharks to prevent them from hitting the beaches.
Agriculture. Monitoring and analysis of plantations to determine the level of growth and health of crops. Drones help predict where the best harvest is more accurately.
Arts and entertainment. The profession of “drone artist” has appeared. For example, Reuben Wu, using drones to illuminate Stonehenge at night, found a completely new image of the well-known monument. With a film shot using a drone, you can take part in a special festival in New York.
Photograph of Reuben Wu, who uses drones for lightning for the nature photography. Source
Why do the drones fall
Big players in the drone industry make both hardware and software, but there are companies specializing only in software. In 2021, software companies received $5 billion in investments (up 100 percent from the previous year). The lion's share of the investments was taken by those involved in software creation for drones, but other sectors are also experiencing significant growth.
Artial is a software company that, in addition to developing the intelligent software for drones, has an adjacent market for IT solutions (artificial intelligence, computer vision, BVLOS (Beyond Visual Line of Sight).
To operate drones, you need to hire certified pilots, explains Egor Folley. There are no solutions that enable autonomous flights on the market, the whole flight is completely controlled by a human. There are drones that fly around static objects or along a pre-planned route, but 95 % still depends on the pilot.
Artial's software solution aims to enable drones to operate autonomously. The company develops algorithms based on deep learning that process input data on board of the device. During the flight, the drone will not use a standard terrain map, but build a 3D-map in real time using computer vision. Thanks to this technology, the device avoids collision with static and dynamic objects, be it buildings or power lines, as well as "unexpected" objects that arise during flight, such as a bird. Smart drones will “understand” when to land, start moving, safely complete a maneuver or return back to the origin.
The advantage of the technology is the use of aircraft beyond the line of sight of a person, in dangerous places and areas of unstable radio signal. If a device with autonomous technology loses contact with the pilot, it does not fall, but continues to perform operations, but on its own.
The scope of drones with Artial filling is extremely wide: energy infrastructure, telecommunications, transport, including railway communication. All areas, says Egor, where constant checks, prevention of breakdowns and predictive maintenance are required.
For example, now the service team arrives at a specific site of the power grid, where there is a malfunction or a check is required. Workers manually launch the drone and pilot it. However, they are limited in operation within a radius of several meters. The closest alternative to avoiding the human factor is an inspection done by helicopters, but an hour of its flight costs between 6,000 and 8,000 euros. Therefore, Artial with autonomous technology sees its competitive advantage in expanding the scale of operations and significant savings.
Is Europe for a startup as good as the US?
At the end of last year, Artial was registered in the US, and in July of this year the company incorporated in Spain. According to Egor Folley, “the US drone market is the most resourceful, but product development requires 4-5 times more financial resources, and at the same time, competition is much higher.” That’s why we are focusing on Europe, but plan to operate in North America as well in the future.
The founders of Artial believe that the EU is interested in the new technology leaders so that there is a sustainable competitive business that adds values, pays taxes and creates jobs. The European Commission has launched many programs to support the technology sector. For example, the European Institute of Innovation and Technology supports start-ups in energy, biotechnology, and health. If the project is interesting and the team is strong, you can get a maximum grant of 2.5 million euros.
Thanks to the Plazza Accelerator from EIT Urban Mobility, young entrepreneurs received a place in the coworking space.
Barcelona has an active startup ecosystem. The Barcelona Activa, business support center, does not directly finance new projects, but it helps to create a positive reputation for start-ups, consults for free, explains how the tax system works, helps with company registration, organizes incubators and accelerators.

The company is in the initial stage of development, when there is an MVP launched, and young entrepreneurs are actively collaborating with companies to launch a beta version and test their solution. Now Artial is in the process of signing preliminary agreements with potential clients. With their help, field tests will be carried out on specific objects with real drones.

The company's focus on AI and robotics, Egor says, is where most of the investments go. Drones are just a pilot project. If you fail to take off in this industry, it is easy to pivot and apply algorithms in another segment. They have already been contacted by companies that work with autonomous systems for cars, Folley said.
Egor Folley, founder and CEO
In Artial, he is responsible for the general vector of development and the technical part. Graduated from MIREA (Russian Technological University). Started the PhD program in Nanobiotechnology at IBEC in Barcelona. He started his career in robotics and developed control systems for mobile robots, then worked as a tech-lead in departments for the development of ML/DL models and pipelines in the areas of computer vision, predictive analytics and embedded systems.
“Working for a short-term profit is not interesting, but doing a cool project with huge potential for the future sounds much more reasonable.”