Texas-Based Hylio Scales Up: From Dorm Room to 5,000 Ag Drones a Year

Ag drone company to ramp up output with new Texas plant

by DRONELIFE Features Editor Jim Magill

Hylio, which makes large autonomous agricultural drone systems, plans to greatly expand its ability to produce American-made products by opening a new manufacturing plant in Texas in the coming months.

In an interview at the recent Xponential 2025 conference in Houston, CEO Arthur Erickson said the new 40,000-square-foot facility, which the company plans to open soon on the same property as its headquarters in Richmond, Texas, will increase Hylio’s drone production capability by about 500 percent. The company, which currently produces between 500 and 1,000 drones per year, will be able to manufacture 5,000 drones annually by 2028, he said.

“We are just now putting the final touches on a new production facility,” Erickson said. The additional capacity has long been needed to accommodate an expansion for the fast-growing company.

Hylio currently operates out of a 10,000-square-foot facility that serves as both its manufacturing plant and operational headquarters. Large storage containers sited on the property give the company between 6,000 and 7,000 additional square feet of warehouse space.

Hylio’s capital costs for the new facility are expected to come in at a range between $1.2 million and $1.3 million, with employee labor helping to keep the costs down.

“We actually used our own staff to build out a lot of the building ourselves,” Erickson said. “Of course, we had some third-party contractors come in for a lot of the stuff that requires zoning, certification and whatnot.”

He said he expects that the opening of the new facility will result in the company staff increasing from its current level of about 65 employees to around 100 by the end of this year. By 2029, Erickson said he expects that Hylio will boast between 200 and 300 employees, “most of whom would be production hardware technicians.”

Financing for the company comes from private investors, with Erickson and his three co-founders owning the majority of the shares of Hylio, and making all the decisions regarding the company’s future.

“We had some angel funding from early on. We actually used that equity later to raise some money on the StartEngine crowdfunding platform,” he said. StartEngine is an alternative investing platform geared to providing funding for small, technology-driven start-up companies.

“It’s a newer concept and SEC has regulations for it. It’s almost like a miniature IPO (initial public offering) Erickson said.

The expansion project is substantially complete, he said.

“The building is basically done, and let’s say 80% of the staff has already moved in, so we just have a few of the teams left to move into the new building, but it’s up and running. It’s got AC, it’s got electricity, and it’s already producing some of our parts and our drones right now.”

Started in a dorm room

As an aerospace engineering student at the University of Texas at Austin, Erickson and two fellow students, Nikhil Dixit, Mike Oda launched Hylio in early 2015. Dixit currently serves as chief technical officer and Oda as chief financial officer. Shortly thereafter, the trio added a fourth cofounder, Nicholas Nawratil, who currently serves as Hylio’s chief operating officer.

“The first few years of the company were spent prototyping, ideating, doing service work for revenue, but not quite selling the systems yet,” Erickson said.

In an early demonstration of the capabilities of autonomous drones, the company conducted the first drone BVLOS payload deliveries in Costa Rica in 2017. After several attempts to commercialize the technology, Hylios’s cofounders decided to focus the company’s efforts on producing agricultural unmanned systems and began producing drones for sale in 2018.

“What we do now primarily is we design, manufacture, and then sell these large autonomous drone systems that automate precision crop input operations: applying fertilizer, pesticides and seeds in a very precise, safe and autonomous manner,” Erickson said.

Although the company initially provided some drone-related services to the agricultural community, it now operates strictly as a manufacturer. “We sell both to actual direct agricultural producers themselves, so farmers and ranchers, but we also sell to the agribusinesses that service these farmers and ranchers.”

The company’s customer base has expanded to agricultural communities across the United States, which accounts for about 90% of its business. In recent months Hylio has expanded its business to Canada, Europe and Australia, as well as to Latin American, where it does business in Guatemala, Honduras, El Salvador and Costa Rica.

From its beginnings, Hylio has striven to create a U.S.-based alternative to compete with market leader DJI, which is estimated to hold more than a 70% share of the global agricultural drone market.

“We have always, from day one, tried to make as U.S.-made drone as possible. But of course, it’s a globalized supply chain,” Erickson said. All Hylio products are NDAA-compliant, meaning that all the critical electronic components are approved by the U.S. Defense Department’s Defense Innovation Unit (DIU).

“This means that they’re not made with components that come from China or from Chinese companies, or from Russia or Iran,” he said. “They’re safe and legal for the US government to purchase and utilize.”

Hylio’s autonomous unmanned aerial systems offer its agricultural a number of features not available with equivalent DJI systems, Erickson said.

“DJI makes mass-produced drones. That’s one of their strengths; they’re vertically integrated … so they can make a drone that is relatively cheap in terms of accessibility,” he said. “However, it’s limited in terms of its high-end functionality because again, they’re making a commoditized product. It’s a one-size-fits-all approach.”

Hylio takes the opposite approach to marketing its unmanned vehicles and systems. “Our product’s going to be a little more expensive upfront, but it’s going to pay you back in dividends multiple times over because of its high-end productivity,” Erickson said.

Compared with its competitor’s products, Hylio’s systems offer customers better user interface, better customer support and advanced software with features that allow the customer to be more efficient, especially when operating its drones in a swarm configuration, he said.

First company approved to fly ag drones in swarms

Hylio was the first company in the United States to receive permission to legally fly agricultural drones in swarms. DJI currently does not offer hardware or software that would allow its UAVs to fly in swarm configurations, Erickson said.

Having a drone fleet that configured to fly in a swarm gives Hylio customers a great advantage, he said.

“In the United States, we have a labor shortage in a lot of industries, but especially agriculture. So, the name of the game in ag is to do as much work with as few people as possible,” Erickson said.

“If you can imagine doing 50 acres or 60 acres per hour with one Hylio drone, you could almost multiply that linearly by having two or three,” he said. “So, you’re really just force multiplying the effectiveness of a single person.”

The versatility of Hylio’s products allows them to be useful to a broad range of customers, everything from the family-owned farm of a few dozen acres, to large agribusinesses with thousands of acres under cultivation, he said.

Erickson said Hylio is continuing to innovate, for example developing the use of artificial intelligence (AI) tools to map out the most efficient way to spray a farmer’s fields. The company is also building out tools that combine machine learning with computer vision, RGB or multispectral imagery to produce and analyze data that can identify weed outbreaks or crop areas that need more treatment.

Read more:

• Hylio Achieves FAA Approval for Swarming Heavy Drones in Agriculture
• Drone Nerds Expands Support for American Farmers with ABZ Innovation Partnership

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Jim Magill is a Houston-based writer with almost a quarter-century of experience covering technical and economic developments in the oil and gas industry. After retiring in December 2019 as a senior editor with S&P Global Platts, Jim began writing about emerging technologies, such as artificial intelligence, robots and drones, and the ways in which they’re contributing to our society. In addition to DroneLife, Jim is a contributor to Forbes.com and his work has appeared in the Houston Chronicle, U.S. News & World Report, and Unmanned Systems, a publication of the Association for Unmanned Vehicle Systems International.