AGRICULTURAL DRONES ARE READY FOR LIFTOFF
Started in a UT dorm with a few thousand in savings, Hylio now sells about 40 devices a month
On a gray and muggy afternoon, several hundred handsome black cattle went about their business at the Wodagyu Ranch in Richmond, seemingly undisturbed by the beeps and buzzing overhead.
“They’re certainly used to it,” said Arthur Erickson, co-founder and CEO of agricultural drone company Hylio, which he and several friends began in a dorm room at the University of Texas at Austin about 10 years ago.
Co-founder Mike Oda grew up on the Fort Bend County ranch, Erickson explained, meaning that the company’s co-founders always had a suitable place to tinker, ideate, manufacture and test their drones, which are used to apply herbicide, insecticide, fertilizers and other chemicals over farm and ranchland. Now they have grown to a company of about 75 people, with a foothold in the rapidly growing agricultural drone market.
Erickson explained that when he began college in 2012, aerospace engineering students like himself were abuzz about drones and space, two sectors that were seeing rapid innovation and growth.
He was drawn to drones, seeing their potential practical uses, and soon found that several of his friends, also from the Houston area, had complementary skill sets.
Oda, now the company’s CFO, was majoring in finance at the McCombs School of Business; Nikhil Dixit, now CTO, was studying computer science; Nick Nawratil, COO, was also an aerospace engineering student.
All were able to put a few thousand dollars of their personal savings into the business, which officially launched in 2015, and soon began offering drone spraying services for $20 an acre to help finance
operations. Hylio sold its first drone at a trade show in Indiana in 2018, Erickson said, to a farmer in his 60s or 70s who had never used a drone before but was convinced of its usefulness after a brief test flight.
The big advantage of using drones to apply chemicals, Erickson continued, is that it costs less than using a tractor or airplane. The equipment is cheaper to own and operate, to start, and carries little risk of the collateral damage that can undercut a farmer’s yields and, by extension, profits.
“With tractors, you’re restricted to just 2D work. You can only go on the ground. So you run over a lot of your crops, and you compact your soil,” Erickson said. “Airplanes don’t have the compaction issue, obviously. But they require really high insurance, and the vehicles themselves are really expensive. Also, they drift like crazy, and they have no way to push down that chemical.”
It happens somewhat regularly, he explained, that chemicals dispersed by airplanes drift to adjacent land, killing a neighbor’s cucumbers, perhaps, and leading to frustration or even lawsuits.
“The drones are really precise. They push the chemical down. They avoid the drift. They avoid the soil compaction. They’re not trampling any crops,” Erickson said. “They’re cheaper.”
Hylio is currently selling about 40 drones a month, Erickson said, with packages including the drone, its controller and software starting at $20,000 for its most compact model, the AG-210, which has a 2.5-gallon tank and can cover about 15 acres in an hour. The company’s largest model, the AG-272, has a capacity of 18 gallons and bills itself as “the biggest spray drone on the market.”
The agricultural drone market is currently valued at $3.6 billion, according to Drone Industry Insights, a trade group. And by all accounts, it is poised for dramatic growth in the coming years.
Hylio, which is privately held, is poised to capture part of that. In February, the company received an exemption from the Federal Aviation Administration, allowing up to three of its drones to be flown in concert by a single operator. It is the first company to receive that exemption, which raises the potential for greater efficiency in spraying large areas.
In addition to that, the biggest player in the commercial drone space, the Chinese firm DJI, has come under scrutiny from lawmakers who consider it a security threat, which has spurred many American farmers and ranchers to look for alternative drone manufacturers.
Erickson, for his part, says Hylio is planning for fivefold growth over the next two years, if not sooner.
“It’s still such a new industry,” he said, as the drones rested in the pasture and the cattle continued to munch their grass.