Red Cat shakes off FPV drone racing in favor of more military focus with Firestorm investment

Enterprise drone giant Red Cat is doubling down on its focus on making drones for the military. The Puerto Rico-based military tech company, which owns notable enterprise and military drone companies such as Teal Drones, this week announced an investment in Firestorm.

Firestorm is a U.S.-based company building a modular drone that is also 3D-printed and payload agnostic. Red Cat provided few details on the finances, aside from that it’s “a materially significant investment.”

The funding is likely to propel Red Cat’s other subsidiaries forward — particularly Teal, which is most famous for its Golden Eagle surveillance drone, and also recently launched what’s called the Teal 2 drone.

“We believe that our Teal 2 drone and the Firestorm UAV could be a great combination for the warfighter,”  said Red Cat CEO Jeff Thompson in a prepared statement.

The Teal 2 drone was designed specifically for nighttime operations and has a military focus at its forefront. In fact, Red Cat has already filled an order from U.S. Customs and Border Protection for 54 units of the Teal 2, and the company said it has recently been visiting NATO countries to discuss how Ukrainian forces might use the Teal 2 to counter Russian forces particularly after dark.

The Teal 2 drone.

What is Firestorm?

Firestorm markets itself as “a new category of fixed-wing UAS with 30-day product iterations, a commitment to open-system architectures, and an additive manufacturing approach that allows them to scale production in an elastic manner. ”

The drones have especially-long range, and can also loiter for longer durations, making them more efficient and cost-effective.

With the Red Cat investment, Firestorm gets a leg up in a myriad of ways, including having access to Red Cat’s manufacturing facility in Salt Lake City which could help it ramp up production.

Red Cat’s hobby days are over

Red Cat at one point owned a range of drone companies including famous names like Fat Shark, which is perhaps best known for its role making FPV goggles for drone racing (though it also makes other products like an all-in-the-box FPV drone racing kit. The portfolio also included drone lifestyle and racing brand Rotor Riot, as well as remote inspection company Skypersonic and Dronebox, an analytics platform for cloud-based flight intelligence.

But these days, Red Cat, which is publicly traded on the Nasdaq stock exchange, calls itself “a military technology company that integrates robotic hardware and software to provide critical situational awareness and actionable intelligence to on-the-ground warfighters and battlefield commanders.”

It still owns Skypersonic, and it most prominently touts ownership of Teal, which it acquired in 2021. It also recently partnered with Tomahawk Robotics and Reveal Technology.

But as far as some of the more hobby-focused companies go, they’re gone. At the end of 2022, Red Cat announced that it would sell off its consumer division — which consisted of Rotor Riot and Fat Shark Holdings — to a company called Unusual Machines for $18 million (consisting of 5 million in cash, $2.5 million in a convertible senior note of Unusual Machines, and $10.5 million in Series A convertible preferred stock). Those companies were all about FPV, drone racing and other facets of recreational and hobby drones.

“The sale of Rotor Riot and Fat Shark Holdings will allow us to focus our efforts and capital on military and defense,” said Red Cat CEO Jeff Thompson.

Though hobbyists and racing folks need not worry. Rotor Riot is still alive and well, including its active YouTube channel.

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