China's Ehang gets US$42 million to expand commercial use of drones as industry start-ups lure windfalls

Ehang has become the latest Chinese drone maker to attract significant capital, with the start-up announcing on Monday that it has raised US$42 million in a series B round of funding.

It said it will use this to further research ways of expanding the commercial use of drones to include search-and-rescue missions, mapping and agriculture, among other plans.

Investors included at least six Chinese funds. The round was led by China's GP Capital, which manages US$1.4 billion, but also included ZhenFund, Lebox Capital, Oriental Fortune Capital, PreAngel and US-based GGV Capital.

READ MORE: Most popular and innovative Chinese drone companies

Drones have a variety of uses beyond their military application, such as water and disease control in farming, faster and more accurate mapping, and gathering large amounts of data for agricultural use.

Venturing into these areas could put Ehang in direct competition with China’s DJI, the world leader for civilian drones. 

Based in the former boomtown of Shenzhen, in southern China’s Guangdong province, DJI controls about 60 per cent of the global market.

Ehang said its latest windfall will also be used to grow its team and fund its market expansion in a rapidly heating-up industry where comprehensive regulations are still being formed. 

To protect this fledgling industry, in which China ranks as the dominant player, Beijing recently imposed a ban on exports of certain high-performance drones.