Pursuing a PhD at a Chinese top university is a challenging task, and doing so while navigating a drone startup is certainly no easy job. However, these are the major two goals for 29-year-old Chen Fangping, founder and CEO of autonomous industrial drone provider iKingtec, and so far, he has excelled in both missions.
Chen has been named in the Forbes 30 Under 30 Asia class of 2020 as one of the top 30 young entrepreneurs in the “Industry, Manufacturing & Energy” sector in the region, while his research on industrial autonomous drones—which is aligned with China’s push to build a more sophisticated digital infrastructure— granted him the prestigious May 4th Medal, the top honor for students at Peking University.
His firm, iKingtec, founded in Beijing in March 2017 when Chen was still a postgraduate student of electronic engineering and computer sciences at Peking University, recently closed a RMB 180 million (USD 25.3 million) Series B round in June and has been ranked by startup-serving platform Dark Horse Technology Group as one of the top 100 unicorns in the new digital infrastructure sector in China.
KrASIA recently spoke with Chen about his company and the drone market in China.
Emerging after a boom-bust cycle in the drone market
In 2012, when Chen was still an undergraduate, Shenzhen-based firm DJI launched the Phantom 1, a ready-to-fly quadcopter, bringing drones closer to consumers, a shift away from earlier perceptions that these devices were only for professional filmmakers or companies.
Noticing the popularization of the technology, venture capital firms flocked to this sector in 2014. However, as the investment frenzy started to cool down in 2016, many of DJI’s rivals, including US-based 3D Robotics, Beijing-based Zerotech, and ZeroZeroRobotics faced major difficulties and slumping sales.
“Out of 500 drone companies in China, almost 300 went broke, most of which were consumer-drone makers, while the rest were industrial drone manufacturers,” Chen told KrASIA, adding that he forecasted that such companies would fail as their products were difficult to use.
While the drone sector was undergoing market consolidation in late 2016 and early 2017, Chen was busy participating in several entrepreneurship competitions designed for college students to showcase their innovations. In doing so, he attracted the attention of several investors with his drones concepts.
In November 2016, Chen’s I-King autonomous drone was recognized as the “most creative project” by judges of the 9th National Conference on Undergraduate Innovation and Entrepreneurship, held by the Education Ministry of China. One investor came to advise Chen on commercializing his drone technology around 2017, further inspiring Chen to start his own company, he told KrASIA.
Chen decided to found his own company in 2017, three years earlier than he originally expected. “RMB 10 million (USD 1.4 million) in angel investment funds arrived one month after the company’s launch in Beijing,” he said.
From the beginning, Chen focused on developing truly “unmanned aerial vehicles,” or drones able to performs tasks without human controllers.
The company rolled its first industrial drone, the Hu Jing, in 2018. Taking off automatically from a four-square meter box platform, or “airport,” named Hu Xue, the Hu Jing can fly up to 20 kilometers away to perform tasks, such as inspecting power wires, aiding fire fighting or monitoring pollution, while it can also return to the base to swap batteries or equipment including cameras, infrared thermal imaging machines, or loudspeakers, autonomously.
An employee stationed in a control room only needs to set up the planned tasks in advance of deployment. Chen explained that “Hu Jing drones are just like eagles who can go back to their home, the airports, all by themselves.”
The company’s drones have been also adopted in the northern Chinese city of Tianjin during the COVID-19 pandemic in February and March. Equipped with a deep learning software platform, the drones were able to fly near people not wearing masks to tell them, via a loudspeaker, to wear the protective face mask.
iKingtec has generated more than RMB 100 million (USD 14 million) in revenue in 2019, twice as much as its revenue in 2018, while collecting nearly RMB 10 million in profits last year. Chen believes his firm can maintain between a two and three-fold annual growth in revenue over the next three years, while he is set to finish his doctoral degree next year.
A Hu Jing drone is inspecting wires in China. Video provided to KrASIA
Envisioning a USD 14 billion industrial drone market in China
Han, whose full name is not disclosed for privacy reasons, is an engineer serving Zhoushan Power Supply Company, a subsidiary of the State Grid of China, the country’s largest power grid operator. He has witnessed how the industrial drone sector has evolved in the past five to six years.
His first experience with drones at the State Grid dated back to 2014 when a device developed by Beijing-based Fangzhi didn’t live up to its expectations and large price tag of RMB 600,000 (USD 86,000) and was only operational for about six months.
In early 2018, a division of Zhoushan assembled another drone with parts they bought from DJI and put the tailor-made machine into service. However, the results were uninspiring and the tech was ditched in late 2018.
Finally, in 2019, Zhoushan became a client of iKingtec’s Hu Jing drones. “We used wire towers as high as 380 meters in Zhoushan, which has lots of small islands, to test Hu Jing on days with moderate to gale-force winds for about two months,” said Han, adding that four drones will be fully put into service soon, after months of delays due to the COVID-19 pandemic.
iKingtec’s Chen forecasts there will more advances in this industry and that drones will perform increasingly more complex tasks, at heights as high as 500 meters from the ground.
Market research firm Frost & Sullivan predicts that the market for drones in the power and utility industry will continue to expand at a compound annual growth rate of 23.6% in the following decade, reaching USD 515 million by 2030.
The same report estimates that the current adoption rate of drones in this sector is less than 10% globally, leaving plenty of room for growth. Other competitors to iKingtec, such as Shanghai-based Foia and Suzhou-based Xingluo (Skysys), have also rolled out autonomous drone solutions and are vying for market share.
“The industrial drone market can even see an exponential ramp-up in the foreseeable future to reach RMB 100 billion in size in China, as great demand from activities including routine infrastructure inspection to disaster control, will emerge,” said Chen.
This article is part of KrASIA’s “Inside China’s Startups” series, where the writers of KrASIA speak with founders of tech companies in the country.