US public safety technology company Axon has announced a $1.2 billion investment in drone manufacturer Skydio, deepening a partnership that the two companies considered turning into a full acquisition.
The agreement values Skydio at $5.2 billion before the investment and will increase Axon’s fully diluted ownership by about 20%. Skydio will remain independent, with Axon taking a minority, non-voting stake.
Under the expanded partnership, Axon will become Skydio’s exclusive distributor for public safety customers in the US and Canada, while Skydio will become the exclusive drone manufacturer supplying Axon in those markets.
In a LinkedIn post, Skydio co-founder and CEO Adam Bry said both companies had seriously considered an acquisition before deciding they were better positioned to grow independently.
“Both companies seriously considered doing it,” Bry wrote. “But we came to believe we can both be most useful to the world as independent companies.”
Bry also said Skydio had not needed to raise additional capital, with most of the investment instead intended to provide liquidity for existing shareholders and employees.
The transaction will comprise a mixture of cash and Axon shares, including new capital for Skydio and purchases of existing shares. It is expected to close in stages during the fourth quarter of 2026 and first quarter of 2027.
The investment builds on growing demand for Drone as First Responder (DFR) technology, which lets emergency services deploy autonomous drones to incidents before officers arrive on the ground.
Skydio currently serves more than 1,500 public safety customers, while more than 28 million Americans live within two miles of one of its DFR docks. Axon estimates the addressable market for the technology in the US and Canada at approximately $13 billion.
Although the exclusivity agreement focuses on public safety, Skydio’s independence means it can continue expanding its military and industrial operations outside the arrangement.
The California-based manufacturer supplies every branch of the US military and the armed forces of 32 allied nations, making it an established supplier of autonomous systems for defence applications.
Bry said the investment would support Skydio’s ambitions across military, energy, construction and transportation markets, alongside public safety.
The company expects to achieve approximately $1 billion in total bookings during its current financial year, reflecting growing demand for its autonomous drone technology.
