China drone maker DJI wins backing from Silicon Valley investor

[May 06, 2015]  By David Morgan

WASHINGTON (Reuters) - Chinese drone maker SZ DJI Technology Co Ltd has secured one of its largest investments yet from a Silicon Valley venture capital firm that was an early backer of Internet pioneers such as Facebook Inc, Etsy Inc and Dropbox.

The Shenzhen-based company, a global leader in selling commercial and recreational drones, said on Wednesday that Palo Alto, California-based Accel Partners had agreed to invest $75 million in the company to help fund its expansion.

The companies declined to comment on how the investment would value DJI, but DJI was in talks last month to raise capital at a valuation of $10 billion, according to people familiar with the matter.

DJI said talks continue with other potential partners and investors but no more near-term partnerships are expected. Details of the Accel agreement are expected in coming weeks.

"The investment, one of Accel’s largest single investments, is part of a broader effort between the two organizations to help DJI’s global expansion efforts," DJI said in a statement.

Viewed by U.S. and European rivals as a low-end producer of drones, with its most popular aircraft models priced at about $1,200, DJI has said it intends to develop more sophisticated drones for industrial customers.

DJI estimates it already has about 70 percent of the commercial market worldwide and a larger portion of the consumer market.

Accel partner Sameer Gandhi said his firm spent a year meeting with more than 100 drone-focused hardware and software companies before choosing DJI as an investment partner.

"We share the long-term vision of creating a next-generation robotic platform to open the skyways to all kinds of consumer and business applications," he told Reuters.

DJI has already established a strong early lead in the U.S. commercial market as companies turn to its inexpensive, light-weight flying devices for a host of uses from shooting films to mapping and site inspections.

The Chinese manufacturer has also converted drone technology into non-UAV (unmanned aerial vehicles) camera and image transmission products for film and television.

Known for its early backing of Mark Zuckerberg's Facebook, Accel was one of the social network's largest shareholders when it went public in 2012. The firm has also played a role in backing multibillion-dollar technology startups such as Flipkart, Dropbox, Spotify, Cloudera and Slack.

Prior to DJI, Accel said it had led an investment in Skydio, which makes drone navigation systems using computer vision, image sensors and motion-planning algorithms.

(Reporting by David Morgan in Washington; Editing by Soyoung Kim and Ken Wills)

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