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Red Cat makes small drones and drone software for soldiers, police, and security teams.
Red Cat Holdings is a small American company that builds short-range drones — the kind a soldier or a police officer can carry in a backpack and toss into the air. Its best-known product is the Teal drone, used by the U.S. Army and allied militaries for scouting ahead, spotting threats, and seeing over the next hill without sending a person into danger. The company also sells ground control stations and software that lets one operator fly several drones and share what they see with a command post.
The business is built on a simple idea. Armies used to buy big, expensive drones. Now they increasingly want lots of cheap ones they can lose and replace. Red Cat's pitch is that a soldier should treat a small drone like ammo, not like a fighter jet. That shift — plus the war in Ukraine, which showed how much small drones matter — has pushed Western militaries to buy more of them. The U.S. Army picked Red Cat's Teal drone for its short-range reconnaissance program, and the company has been working to scale up production and win follow-on orders. It also makes drones and software for public safety, like police and fire departments, though defense is the main story now. Red Cat is tiny next to the defense giants, and its finances reflect that. It has generally lost money as it spends on developing drones and building manufacturing capacity, and it has funded itself partly by selling shares. That makes it a speculative, high-risk company: its future depends heavily on whether military orders grow big enough to turn it profitable. Investors often compare it to AeroVironment, a larger drone maker with a longer track record of government contracts.
The bigger question is competition and scale. Big defense contractors and a wave of drone startups all want the same military dollars, and the Pentagon has been pushing to buy drones from many suppliers and to manufacture them cheaply. Red Cat's edge is that it got in early with a drone the Army actually selected, and it has been buying up pieces of the supply chain — including drone software and manufacturing — to control more of the finished product. Whether that early foothold turns into a durable business is the whole bet.
Saved answer · last researched 30 Oct 2026