A Dark Horse in Domestic Avionics Secures Three Rounds of Financing in 8 Months, Aiming to Be China’s Honeywell | 36Kr Exclusive

Text | Azhi

Developing the "brain" for aircraft has never been an easy task, especially in China.

This is a field that has long been monopolized by European and American giants. Four companies, Honeywell, Collins Aerospace, Thales, and GE, have captured more than 80% of the market share. From the current industrial background, independent avionics not only matter for the supply - chain security of China's aviation industry but also serve as one of the important prerequisites for domestic civil aircraft, eVTOL, and other new aircraft models to achieve cost control and commercialization.

In this core area, a startup company established less than four years ago aims to break the international monopoly through full - stack self - research and develop an independently controllable integrated avionics system. It plans to gain a market position from the top - down by targeting state - owned enterprises first and then private companies.

We've learned that Yunji Avionics has recently completed two rounds of financing, Pre - A and Pre - A+, raising tens of millions of yuan. The investors include Haihe Industrial Fund, Yizhuang New City Industrial Co., Ltd., Houtian Capital, Chengdu Science and Technology Innovation Investment, and Zhongli Fund. The funds will mainly be used for technology R & D, airworthiness certification of core products, and production capacity expansion.

At the end of last year, we reported on the progress of Yunji Avionics' angel - round financing, which was led by the Beijing Economic Development Area Seed Investment Fund.

In less than eight months, this domestic avionics dark horse has completed three rounds of financing.

With the soaring popularity of commercial space, such a financing pace is not uncommon in the primary market. However, Li Bei, the founder of Yunji Avionics, is not very concerned about so - called trends and the influx of hot money. He believes that avionics is a field that requires long - term technological investment over a decade. In the early verification and growth stages of the business, a company's financing pace is essentially only related to strategic milestones.

"Institutions will only invest when you actually present tangible results. Once new strategic milestones emerge, the funds will quickly arrive, which actually has nothing to do with whether the market is hot or not," said Li Bei.

Top - down Ecological Positioning

From the very beginning, Yunji Avionics has been focused on the R & D and integration of a fully domestic integrated avionics system. Relying on the transformation of scientific and technological achievements from universities and a core team from the Civil Aviation University of China and Shenyang Aerospace University, in terms of products, Yunji Avionics has currently launched three major product series: YJ - 500E, YJ - 1000E, and YJ - 3000E, covering light - sport, normal - category, and medium - to large - sized aircraft with less than 19 seats, and are compatible with various aircraft types such as fixed - wing aircraft, helicopters, and eVTOLs.

In terms of product definition, the YJ - 500E is targeted at the mid - end integrated avionics market, the YJ - 1000E at the high - end market, and the YJ - 3000E at a more advanced level of autonomous flight avionics systems.

The YJ - 500E will be the first product to enter the mass - production stage. The latest progress we've learned is that the YJ - 500E avionics products have been installed and verified on aircraft models such as the RX1E - A, AC311A, and WZ - 11, and have entered the flight - test and airworthiness - certification stages. It is expected to obtain the first random airworthiness certification in the second half of the year.

After obtaining the certification, this avionics product will enter the small - scale delivery stage.

Different from many startups in the low - altitude economy field, Yunji Avionics has chosen a commercialization path of targeting state - owned enterprises first and then private companies. Li Bei mentioned that Yunji Avionics has already signed strategic cooperation agreements with several state - owned aircraft models. An ambitious goal of his is that he hopes Yunji Avionics will secure 80% of domestic civil - aircraft models developed by state - owned enterprises in the future.

"If the annual installation volume of one model is estimated at 20 million yuan, the after - market value will be 60 million yuan per year. After this model's project is completed, it can basically lock in revenues of 600 million to 800 million yuan in the future," Li Bei's strategy is to first consolidate the business foundation with state - owned enterprises, while also keeping an eye on the airworthiness progress of products for private companies, and then consider the potential growth in this part of the market.

The latter could potentially be a market worth tens or hundreds of billions, but in the short term, it cannot enter the large - scale implementation stage.

In Li Bei's view, this top - down market route is crucial because it secures a certain business foundation and an irreversible competitive advantage.

"The R & D investment in avionics systems far exceeds that of other components. If the technical solutions for each model are different, the overall R & D investment will be unbearable. This means that avionics must follow a standardized path and be deeply integrated with aircraft manufacturers." In fact, it is precisely this positioning as a system integrator that makes avionics one of the most difficult parts in the aviation supply chain to be absorbed internally by aircraft manufacturers, giving it greater independence and ecological value.

For aircraft manufacturers with a stable supplier system and high replacement costs, once an avionics company secures its ecological position, it can not only bring continuous cash - flow income but also is expected to create a leading - player effect, giving it more initiative in setting industry standards and integrating the ecosystem.

Increase Technological Investment for at Least 10 Years

From the perspective of the industry environment, China's general aviation market is at a window period where infrastructure improvement and domestic substitution are accelerating. For a long time, the installation rate of domestic avionics systems in the civil aviation market has been extremely low. Driven by low - altitude economy policies, the emergence of new types of aircraft such as eVTOLs and electric fixed - wing aircraft has created new incremental demand and technological opportunities for domestic suppliers.

The avionics system is the core of all electronic devices on an aircraft, covering eight major subsystems such as navigation, flight control, and communication. The analogy of the "brain" of an aircraft vividly reflects its technical complexity and the difficulty of system integration.

It is reported that Yunji Avionics currently conducts self - research in various fields such as instrument systems, atmospheric systems, flight management systems, integrated navigation systems, radio systems, power component systems, aviation buses, and integrated computers. At the product level, 90% of components are domestically sourced, and the overall cost can be controlled at 50% - 70% of international competitors.

In addition to the cost advantage brought by the increased domestic sourcing rate, Yunji Avionics' products have also achieved a breakthrough in a key technical indicator: a significant reduction in power consumption, which is about 30% of that of similar competitors.

With the limited lithium - battery capacity of domestic small - and medium - sized electric/fuel - powered general aircraft, low power consumption means better thermal management and less power - consumption burden, which is a technical barrier with practical engineering value.

In fact, to comprehensively consider multi - dimensional goals such as performance, cost, and domestic sourcing, Yunji Avionics has chosen a different technical path from the mainstream. While the aviation industry generally uses a CPU + GPU architecture, Yunji Avionics has selected a computing platform centered around MCU chips.

"MCU chips have low power consumption, but the challenge lies in the extremely high requirements for software development and adaptation, and a large amount of work needs to be re - developed," Li Bei mentioned. At the chip - integration level, the team has stacked the MCU chip and the memory chip back - to - back, reducing the number of chips from eight to one in hardware and lowering the total power consumption to 10% of the original level.

However, this highly integrated solution also relies heavily on the ability of software transplantation and platform adaptation at the underlying level, which is the experience barrier that Yunji Avionics' engineering team has built up from the Civil Aviation University of China and Shenyang Aerospace University.

Technological breakthroughs are from 0 to 1. Only when the cost and performance advantages are continuously verified can they be transformed into actual order advantages. This year will be a crucial year for Yunji Avionics' first - batch product deliveries in small quantities, with an expected revenue of about 20 million yuan, but this should only be the beginning.

For an industry with a long development cycle like aviation, Li Bei plans to continuously increase R & D investment for at least the next 10 years to complete the core part of China's aviation industrial chain. He has a long - term vision of "becoming the Chinese Honeywell."