Volatus and Drone Delivery Canada announce merger

The Canadian UAV sector is undergoing what could be the start of wider consolidation as diversified hardware and services provider Volatus Aerospace merges with specialized cargo transport company Drone Delivery Canada (DDC)

Announced as a “50/50 merger of equals,” the combination of Volatus and DDC seeks to create a “global diversified drone technology and services leader,” according to a statement on the link-up. The operation is expected to close in the third quarter of this year with the combined company being called Volatus Aerospace Corp. Drone Delivery Canada will maintain its brand identity in marketing and providing cargo services.

Volatus CEO Glen Lynch and DDC leader Steve Magirias will co-direct the combined company. They called the merger a natural development in the maturing drone industry, as myriad startups that initially entered activity join forces, or drop out. Many market observers in both Canada and the US expect to see continued consolidation as hardware and service providers move to gain critical mass.

“This next evolutionary step for both companies will help revolutionize how drones are used for tasks like deliveries, inspections, and surveillance by shifting toward more advanced, beyond visual line of sight operations and the scalable management of drone fleets by remote pilots,” the release said.

The move also appears to be a sign both companies feel moving ahead together will be more financially viable than carrying on separately.

DDC, for example, just this week announced disappointing first quarter 2024 results featuring an 80% decline in revenues of only $103,522, and an operating loss of $800,000. Volatus announced a 39% Q1 revenue increase of $6,623,741 compared to the same period last year,  but a comprehensive loss of $2,991,319.

Once combined, the new Volatus Aerospace Corp. will also take a while to post positive numbers. The merger announcement noted the new company is “anticipated to be cash flow neutral by the fourth quarter of 2024”—meaning it will lose money are first, before planning to break even by the end of the year.

Still, the statement says the experience, assets, customers, and margins for cost reduction that both merging companies bring to the marriage promise expanded business and profits as of 2025.

“By combining Volatus’ existing drone services with Drone Delivery Canada’s proven expertise in cargo drone delivery and remote operations, the merger unlocks synergies for commercialization, including leveraging key achievements in transporting dangerous goods and medical products as well as routine drone flights in controlled airspace in major metropolitan areas in Canada by Drone Delivery Canada,” it said.