Chinese agritech firm XAG announced on Monday the completion of a 1.2 billion yuan ($181.6 million) new funding round led by Baidu Capital, an investment unit of Chinese internet search giant Baidu, and SoftBank Vision Fund 2.
Other investors included Sinovation Ventures, a venture capital firm led by former Google China head Kai-Fu Lee; Guangzhou Yuexiu Industrial Investment Fund Management, a private equity investment platform of Chinese financial services provider Yuexiu Financial Holdings; and government-backed Guangzhou Emerging Industry Development Fund.
Hong Kong-listed investment China Renaissance served as the exclusive financial advisor to the deal.
XAG’s existing investor Chengwei Capital also participated in the new round. As XAG’s first investor, Chinese VC firm Chengwei Capital had poured $5 million into its initial funding round in 2013, and re-upped $20 million in 2014.
The billion-yuan deal comes as investment activity in the Chinese agritech sector is heating up thanks to favourable government policies.
The Chinese government released a plan in January 2020 to promote the country’s digital agriculture development by leveraging big data, 5G, intelligent agritech solutions, and fresh produce e-commerce platforms. The plan targets to build an agriculture industry, 15 per cent of which relies on technologies and digital solutions by 2025, compared to 7.3 per cent in 2018.
XAG was started in April 2007 by Chinese entrepreneur Peng Bin, a former Microsoft employee, to develop drones and remote ground control systems. The company, which was then called “XAIRCRAFT,” was rebranded to XAG in 2014 as it shifted focus to the research and development of agricultural drones that help optimise agriculture operations, increase crop production, and monitor crop growth.
The Guangzhou-based company has branched out to employ autonomous driving, artificial intelligence (AI), Internet of Things (IoT), and other technologies to power its agricultural drones and robots, as well as smart farm management solutions.
The firm currently delivers products and services to 42 countries and regions worldwide, according to its website. By far, it has served 620 million mu (413.3 billion square meters) of farmland worldwide.
XAG will use proceeds from the round to enhance its R&D and manufacturing capabilities, enrich sales channels, and accelerate the construction of digital agricultural infrastructures, in an attempt to build unmanned smart farms, said Peng in a statement.