It is now common to use drones to replace manual spraying.
Efficiency and accuracy of data collection and processing, as well as the overall cost, are essential to the success of remote sensing services provider.
MCFLY adopts an asset-heavy model as it operates its own service team. At the same time, the company is able to engage closely with farmers.
MCFLY expects to see a growth of over 1000% in business volume this year.
In China, remote sensing technology was first applied in agriculture in the 1980s. After over three decades of evolvement, the technology is now used extensively in areas of agriculture such as resource investigation, sown area monitoring, crop growth and yield prediction and disaster warning.
Most of these services have been directed at businesses or organizations like government agencies, securities firms or insurance companies. While such a business model has a reason to exist given the status quo of China’s agriculture industry, said GONG Huaze, founder and CEO of MCFLY (麦飞科技), a company in this field will find it hard to keep its business going if it relies on institutional clients as its main source of revenue.
That’s why MCFLY has chosen to target farmers to provide them with disease and pest monitoring and targeted pest control services through the use of remote sensing and AI technology.
In China, pesticide application is an important step of the agricultural production process. It is now common to use professional pilot-controlled drones to replace manual spraying. Pesticide application cost the most in crop protection. Given this, MCFLY has leveraged remote sensing, big data and AI technologies to evaluate crop health and generate maps based on which growers can regulate pesticide application with higher precision and consequently save on costs.
To enable effective pest and disease detection and targeted pesticide application, a company must have a strong technological underpinning and excel at research and development. Crucial factors include the efficiency and accuracy of data collection and processing, as well as the overall cost of your solution.
MCFLY will soon roll out a comprehensive solution comprising both the software and hardware needed to carry out the desired tasks. These include a drone platform, a data collection sensor (McVision AgriDetector) and a data processing cloud platform (Mcloud). According to GONG Huaze, it will be a lightweight solution that is hosted in the cloud and capable of real-time data collection and processing.
The company also innovated on its McVision system, both on the software and hardware level to improve its performance in data acquisition, processing, analyzing and display while lowering the cost, said GONG. Compared with its foreign counterparts, which sells for over 400,000 yuan, the McVision system is priced somewhere around 100,000 yuan.
MCFLY’s signature brand MCFLY Agriculture offers solutions mainly for the management of rice and wheat fields. MCFLY’s core database contains data collected from the 3.3 million m2 of experimental cropland it owns as well as the land it has served, GONG noted. In addition to monitoring data with drones, MCFLY uses both remote-sensing data and ground truth to complement its database. As more data is taken in, the company will continue to train and optimize its algorithms.
MCFLY offers a complete suite of services from disease and pest monitoring to targeted pesticide application, and allegedly charges markedly lower than the cost incurred if farmers purchase pesticides themselves and hire people to do the spraying work. More importantly, MCFLY can help growers cut the use of pesticides by 50% or higher while ensuring the same result of crop protection, thus boosting crop quality and value conversion efficiency.
The total area of rice and wheat fields in the country is estimated at approximately 600 billion m2, which could translate into a market worth 1 trillion yuan (approx. $ 158 billion) for companies like MCFLY.
MCFLY has expanded its presence across the supply chain. In 2017, it signed cooperation agreements with five upstream pesticide manufacturers and established a dedicated service team for MCFLY Agriculture. The company has provided services to some 666.7 million m2 of cropland in and around Hubei since 2017, which covers an area of over 6.7 million m2. Based on the orders it has received so far, GONG estimates that the company will see its business volume grow by at least 1000% in 2018. Moreover, MCFLY Agriculture has expanded its operations beyond Hubei this year and now operates in Jiangsu and Liaoning as well.
MCFLY has its own views on the provision of agricultural services in China. As far as the founder is concerned, since agricultural services are highly seasonal, it will be hard for a company to build customer loyalty if it operates under the platform business model. MCFLY may have an asset-heavy model as it operates its own service team, but it’s able to engage with farmers on a deeper level. Once it gains control of enough cropland and farmer resources, it may either monetize them itself or cooperate with third parties on a commission basis to offer value-added services, for example, targeted fertilizer application on top of the pesticide delivery service.
That said, given that the value chain involves numerous parties, MCFLY needs to develop a viable and efficiency-maximizing system capable of taking and assigning orders and preparing pesticides. The company’s R&D team comes from JD Group and its order taking and assigning process is modeled after that in the courier industry, GONG noted.
Founded at the end of 2016, MCFLY now has nearly 50 R&D personnel and a regional service team of 100 people, a number that’s expected to grow to around 150 by the end of this year. CEO GONG Huaze holds a Ph.D. in remote sensing technology and is a researcher at the Chinese Academy of Sciences. He’s also part of the team responsible for drafting China’s industry standards for remote sensing products.
Co-founder and COO CHEN Qi holds a master’s degree in remote sensing technology from Wuhan University. He had previously worked as the Product Director at China Aerospace Science and Technology Corporation and Alibaba. CTO LIU Long earned his Ph.D. in Cartography and Geographic Information Systems from the University of Chinese Academy of Sciences and is a senior researcher at the National Engineering Laboratory for Satellite Remote Sensing, National Development and Reform Commission.
Writer: XI Da
New launches, big wins: Early StageNew launches, big wins: Early Stage
Chinese companies are flocking to India, but their optimism needs to be temperedChinese companies are flocking to India, but their optimism needs to be tempered
Nikkei teams up with 36Kr in Asia tech news coverageNikkei teams up with 36Kr in Asia tech news coverage
Grady Laksmono of Moka on supporting small businesses: Startup StoriesGrady Laksmono of Moka on supporting small businesses: Startup Stories
The continent of the 21st century: Venture VoicesThe continent of the 21st century: Venture Voices