China UAV developer United Aircraft raises $167m

The round was led by Long Jiang Fund, which is backed by the government of Heilongjiang Province, where the company has recently launched new operations.

Several Heilongjiang-based investors joined the round. They include an arm of state-owned forest industry player SenGong Investments, provincial government-backed VC firm Keli Investments, and Harbin Venture Capital Group, according to a statement.

It comes three months after an initial Series D round of CNY 2bn from National Manufacturing Fund, Chengdu Heavy Industry Qingyue Fund, Anhui Province Quantum Fund, and Shenzhen-based CoStone Capital.

Gangyin Tian, founder, chairman and president of United Aircraft, said the company will develop UAVs in Heilongjiang as part of an effort to turn the province into the largest UAV base in China. Harbin, the capital of Heilongjiang, is the birthplace of Chinese aviation and has become a major R&D and production bases for helicopters and aero engines.

Founded in 2012, United Aircraft has supplied products to customers in areas ranging from national defence, customs, and law enforcement to transportation, powerline monitoring, and geological exploration.

In the recent term, the company has moved into the development of a next-generation tilt-rotor aircraft, which combine the vertical takeoff and landing and hovering capabilities of a helicopter with the high speed and long-distance cruising capabilities of a turboprop.

Test flights in this area are scheduled for completion in 2025. It represents a departure from United Aircraft's traditional UAV domain, but the company believes the new model will become a popular choice in the private aircraft category.

The shift is partially motivated by the opportunity for faster commercialisation. Electric vertical take-off and landing (eVTOL) solutions have emerged as a prominent theme among private equity investors globally, and some Chinese companies are interested in expanding electrification from vehicles to aircraft.

While eVTOLs are often compared to electrified helicopters and can fulfil most of the same functions, they are unable to hover over sites. However, eVTOLs are regarded as a safer option for tourists wanting to sight-see from the skies.

Going electric means a simpler design – hence the improved safety level because there is less scope for malfunction – and a much lower cost. Space is another advantage. Conventional small aircraft tend to be single-engine or twin-engine; eVTOLs allow for multiple choices.

Recent investments in the space include a CNY 100m pre-Series A for Shanghai-based TCab Tech. Last year, there were also early-stage rounds for Zero Gravity and Volant. They are following in the footsteps of AutoFlight, which was founded in 2017 and received a Series A of USD 100m in 2021.

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