Axon Invests $1.2B in Skydio and Becomes Its Sole Distributor to US and Canadian Police
US public safety technology company Axon has announced a $1.2 billion investment in drone maker Skydio. The agreement also makes Axon the exclusive distributor of Skydio drones to public safety agencies in the United States and Canada.
Axon, the American maker of police equipment including body cameras, announced on Thursday a $1.2 billion investment in drone manufacturer Skydio. Once all tranches close, Axon's fully diluted stake in Skydio will rise from about 15% to about 37%, based on a $5.2 billion pre-money valuation of Skydio. The same agreement makes Axon the exclusive distributor of Skydio drones to public safety agencies in the US and Canada. It is the largest single investment in Axon's history, and it changes how police departments in those markets buy Skydio aircraft.
Structure of the deal
According to Axon's filing with the US Securities and Exchange Commission, about 60% of the deal, roughly $720 million, is cash and the rest is Axon stock. The first tranche closed Thursday: a $254.9 million purchase of 25 million new shares, the only new money going to Skydio. The remainder is a tender offer for up to 68.45 million shares held by existing Skydio shareholders, plus further secondary purchases, which Axon expects to close in the fourth quarter of 2026 and the first quarter of 2027. The shares carry no voting rights, and chief financial officer Brittany Bagley said Axon does not control Skydio. Asked whether this is a path to full ownership, founder Rick Smith said: “We’ll see what the future holds.”
Market and Axon results
Skydio reports more than 1,500 public safety customers and expects about $1 billion in bookings this fiscal year. Axon sizes the market for drones as first responders, which reach incident scenes before officers, at $13 billion across the two countries. Axon has sold Skydio drones since 2021, so the exclusivity formalizes an existing channel. Neither company has said what happens to agencies that bought directly or through other resellers.
Axon's third-quarter results were weaker than forecast: revenue of $909 million against the $934 million expected, a reduced full-year outlook, and a share price that fell about 18% on Friday.
