Chinese agricultural drone company Guangzhou Jifei Technology Co., Ltd (known as ‘XAG’) has announced the completion of a new round of funding worth 1.2 billion Chinese Yuan (US$182 million). As XAG transitions from a purely agri-drone focused business to a provider of all-round smart farming technology, the new funding will increase the pace of change within the company. XAG already provides farmers with precision mapping systems, land-based IoT devices and application software to obtain meteorological and soil readings.
This finance round is the largest commercial ag-tech investment ever seen in China. It was led by Baidu Capital and Softbank Vision Fund (2), Innovation Workshop, Yuexiu Industry Fund and the state-backed Guangzhou Xinxing Fund.
Ag tech is big business in China. Between XAG and rival drone manufacturer DJI they own 80% of the Chinese agricultural drone market. Last month Justin Gong, co-founder of XAG, told the Asia Times that XAG already has 42,000 drones flying over 1.2 million flights every single day. These drones monitor crops, distribute seeds, spray pesticides and fertilize with up to fifty times more efficiency than human hands.
Like Europe and the US, China is struggling to solve the problem of an ageing population and a new generation of young people that doesn’t see its future in manual farm labour, typically preferring to seek careers in big cities. Peng Bin, CEO of XAG, said that the company’s current goal is to build an unmanned ag-tech ecosystem to solve the labour problem with more efficient farm production methods.
XAG has so far invested in developing six different technology lines:
- agricultural drones
- agricultural remote sensing drones
- agricultural unmanned vehicles
- agricultural machinery assisted driving equipment
- agricultural Internet of Things (IoT)
- smart farm management software
The new funding will be used to strengthen XAG’s R&D and manufacturing operations, improve channel service capabilities, develop more intelligent agricultural equipment, and build the ‘unmanned farm’.
12 months ago, when launching XAG’s XIot agricultural IoT system, Peng Bin explained that XAG’s business strategy consists of three parts:
- Digital agricultural infrastructure & data gathering, which involves the production of high-definition farmland maps, navigation networks and agricultural IoT equipment.
- Smart precision farming technology capable of completing centimetre-level accuracy for high-precision navigation, point-to-point delivery and other tasks.
- A simple software-based smart farm management system which uses the SaaS model to control the entire life cycle of the agricultural products.
With COVID hitting this year, projected growth forecasts for XAG were almost certainly impacted. However, XAG’s technology was able to help combat the spread of the virus. Individual farmers (trained pilots of agri-drones) were recruited to carry out aerial disinfection tasks. Some 2,600 drones and pilots were diverted to COVID duties. They reportedly covered 902 million square meters across 20 Chinese provinces with other countries also looking at similar uses for their XAG drone fleets.