XAG (极飞科技), a leading agricultural drone supplier, yesterday announced the completion of a Series D round of financing for an undisclosed amount of money.
Investors include a venture fund under China Unicom and existing shareholder Sinovation Ventures, among others.
Proceeds from this fundraiser will be spent on technical R&D and production innovation related to drone technologies, as well as market expansion.
Founded in 2007 by Peng Bin and a few drone buffs, Guangzhou-headquartered XAG has been among the early pioneers of this technology and related flight control system within China.
As time went on, the firm ventured into the agricultural drone business around 2013, when it sought to develop unmanned aerial vehicles (UAVs) repurposed for an array of use cases, including plant protection, aerial mapping, crop surveying and pesticide spraying, among others.
Its first-generation agriculture drone went out in 2015.
Agricultural drones have been adopted on a wider scale in recent years, as farmers fly them for a number of applications, in particular targeted pest control. For instance, since they spray pesticide only onto designated sections of farmland, expenses come down, along with diminished exposure for workers and nearby residents.
Currently, XAG has been fixated on the development, production and sale of drone, autonomous carrier vehicle, autopilot console and IoT technologies catering to agricultural purposes.
Agtech leader, but losses are piling up
Over the past several years, XAG has emerged as one of the world’s leaders in agricultural smart gadgets, supplying products to 57 countries and areas across the world.
It counts Baidu.venture, SoftBank Vision Fund II, Yuexiu Capital Holding, and GL Ventures among its financial backers.
Last year, Chinese stock regulators halted XAG’s application to list on the Nasdaq-style STAR market of Shanghai Stock Exchange, citing the firm’s widening net losses.
According to its prospectus, XAG posted revenue of 322 million yuan (US$44.05), 357 million yuan, 530 million yuan and 469 million yuan in 2018, 2019, 2020 and the first half of 2021.
The compound growth rate of its revenue amounted to 28.39% between 2018 and 2020.
Nonetheless, during the same reporting period, the company recorded a net loss of 6.72 million yuan, 39.70 millon yuan, 60.85 million yuan and 85.12 million yuan.
Sustained losses and dismal commercial prospects had long cast a shadow over the firm’s IPO ambitions and eventually culminated in the collapse of its bid last year.
Market analysts believe that although XAG had wanted to beat DJI (大疆创新), which dominates the world civilian drone industry with a 76% market share, to become the first listed drone manufacturer, it failed in this attempt.
While still reeling from the aftershocks of its failed IPO, XAG has been struggling to recuperate its strengths. It plans to roll out new agricultural UAV products by the end of this year, to further enrich its product line and cement its role in smart agriculture.