Jimi Heselden, 62, whose company builds the upright scooter, apparently lost control of one of his machines and ran over the cliff into a river, The Daily Telegraph reported Monday.
Various British news organizations said Heselden died in a "freak accident."
The tycoon's body was found in the River Wharfe at Boston Spa near Wetherby Sunday morning, and a Segway was nearby.
"We are absolutely gutted, no one wants to talk about it," a member of Heselden's staff told the Telegraph.
Heselden made his fortune after his Leeds-based firm Hesco Bastion developed "blast wall" baskets that protect soldiers as a replacement for traditional sandbags.
The baskets have been used in every major conflict since the first Gulf War and are one of Britain's most successful military exports. They are also used for a non-military functions, including flood management and erosion control.
Last year Heselden led a British team that bought the U.S. Segway firm, which makes and distributes the distinctive two-wheeled, self-balancing scooters. The company was started by in 1999 by Dean Kamen, who invented the vehicle.