Korean Startup BONE Generates $2M in Year One with AI Drones

When Lee Do-kyung met OpenAI founder Sam Altman in 2023, he walked away convinced that the future of AI wouldn't just live on screens. It would fly, roll, and move through the physical world.

A year ago, Lee founded BONE with a bold mission: build the backbone of South Korea's physical AI industry using drones. The Seoul-based company isn't chasing the crowded consumer market dominated by Chinese giant DJI, which controls 90% of commercial drone sales worldwide.

Instead, BONE is targeting defense and public safety sectors where governments want alternatives to Chinese technology. The strategy is already working. In just 12 months, the startup generated 3 billion Korean won ($2 million USD) selling reconnaissance drones to the military, wildfire surveillance systems to city governments, and agricultural drones to farmers.

Lee's timing couldn't be better. South Korea recently announced plans to train 500,000 drone operators after the Russia-Ukraine war demonstrated how crucial drone technology has become for modern defense. Currently, South Korea holds only 1 to 2 percent of the global drone market despite being a manufacturing powerhouse in semiconductors, automobiles, and shipbuilding.

BONE's flagship product features a clever "mother ship and child ships" design. One main drone carries up to 12 smaller drones that can spread out for reconnaissance, surveillance, and interception missions. The company supplies these systems to clients including Sangju City Hall for wildfire monitoring and the Ministry of Land, Infrastructure and Transport for demonstration projects.

The Ripple Effect

Investors are betting big on Lee's vision. BONE has secured 17 billion Korean won ($11.5 million USD) in funding, including a recent multimillion dollar investment from global venture capital firm Ora Global. The company now employs around 30 people and plans to build a mass production system capable of manufacturing tens of thousands of drones within three years.

Lee's ambitions extend far beyond aerial drones. He envisions BONE producing physical AI robots for land, sea, underground exploration, and even space applications. While humanoid robots from companies like Tesla and Hyundai might take a decade to reach homes and factories, military and public sector drones can deliver results now.

The entrepreneur traces his business inspiration to an unlikely source: reading the autobiography of Hyundai Group founder Chung Ju-yung during military service in 2012. Lee previously co-founded MarqVision, a tech company fighting online counterfeit products, before pivoting to physical AI.

This year, BONE aims to triple revenue to 30 billion Korean won ($20 million USD). South Korea's drone industry is taking flight, and this startup wants to lead the way.