Hoverfly Technologies secures $20 million in funding for tethered drones

SANFORD, Fla. - Hoverfly Technologies, a provider of tethered drone systems, announced Wednesday it has closed a $20 million Series B funding round led by Leonardo DRS (NASDAQ:DRS), a $12 billion market cap defense technology company with a strong financial health rating according to InvestingPro, and new investor Korea Robot Manufacturing (KRM).

Leonardo DRS contributed $15 million to the round, while KRM invested $5 million. As part of the investment, Hoverfly signed a manufacturing agreement with Leonardo DRS to expand production of its Sentry drone and launch a production line for its Spectre system. Leonardo DRS, which has shown impressive revenue growth of 11.4% in the last twelve months and maintains a healthy current ratio of 2.11, appears well-positioned to support this expansion.

"This funding round marks a defining moment for our company," said Steve Walters, CEO of Hoverfly Technologies, in a statement from the press release.

The Florida-based company said KRM will partner with Hoverfly to establish a new facility for domestic production of key components. Both Leonardo DRS and KRM will serve as official resellers and integrators of Hoverfly’s systems.

Aaron Hankins, Senior Vice President at Leonardo DRS and a Hoverfly board member, said the investment reflects confidence in Hoverfly’s tethered drone solutions and will help bolster U.S. defense capabilities through expanded domestic production.

KRM CEO Kwangsik Park noted that the partnership enables establishment of a U.S.-based supply chain for critical UAV components, aligned with national security priorities.

Hoverfly’s technology is the only tethered drone on the Defense Innovation Unit’s Blue List, offering a domestically sourced alternative to foreign drone manufacturers. The company has sold over 800 tethered drones to U.S. and allied defense customers.

Industry forecasts project the tethered drone sector to grow from approximately $140 million in 2023 to over $2.6 billion by 2032, according to information provided in the company’s announcement. With Leonardo DRS showing strong year-to-date returns of 39.4%, InvestingPro analysis suggests the stock is currently fairly valued, with additional insights available in the comprehensive Pro Research Report covering this and 1,400+ other top US stocks.

In other recent news, Leonardo DRS reported its second-quarter earnings, showcasing a 10% year-over-year increase in revenue, reaching $829 million. The company also experienced a noteworthy rise in adjusted EBITDA and adjusted earnings per share (EPS), indicating robust operational performance. Reflecting confidence in its financial trajectory, Leonardo DRS has raised its full-year revenue guidance, projecting growth between 9% and 11%. These developments highlight the company’s strong position in the defense sector. The earnings report underscores significant progress and strategic direction, aligning with market expectations. Investors may find these financial results promising as they reflect solid growth and stability. The company’s revised revenue guidance suggests optimism about future performance. Leonardo DRS’s financial health appears to be on a positive trajectory, as indicated by these recent figures.

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