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Guangzhou-based agricultural drone producer XAG recorded triple-digit progress final yr in its abroad markets, with income from Latin America growing 248% year-on-year and that from Southeast Asia rising by 155%. The corporate didn’t disclose its particular gross sales totals.
Why it issues: Markets outdoors China are a brand new income stream for XAG, which has been dropping cash for years. Whereas the drone maker’s income continued to develop between 2018 and the primary half of 2021 largely due to the Chinese language authorities’s help of good agriculture, its web loss continued to widen throughout this era, based on a prospectus filed in November 2021.
Particulars: Farm drones are the principle income for XAG, accounting for greater than two-thirds of its complete income since 2018, and are additionally the corporate’s important providing abroad.
- XAG is eyeing growth in Vietnam and Brazil, the agency’s abroad enterprise head instructed Chinese language media outlet Caixin, as the previous is a world prime three rice exporter and the latter a serious soybean exporter.
- Southeast Asia and Latin America are in style locations for Chinese language agricultural tech corporations going offshore, as governments in these areas have extra relaxed rules for farm drones, and thus fewer coverage obstacles for corporations selling them, Caixin wrote, citing an business supply.
- Against this, the European Union, US, and UK have stricter rules with regards to agricultural plane. To this point, the US Federal Aviation Administration has exempted one in every of XAG’s farm drones from flying restrictions. Within the UK, two XAG drones, the P40 and V40, had been granted operational authorization by the nation’s Civil Aviation Authority in January.
Context: In November 2021, XAG filed for an IPO on the Shanghai Inventory Change, intending to boost RMB 1.51 billion, earlier than withdrawing the appliance final April.
- XAG recorded a web lack of RMB 60.85 million ($8.88 million) in 2020, an eight-fold growth from 2018, and had misplaced almost RMB 25 million greater than that by half method via 2021. The agency stated it has not but reached profitability because of excessive funding prices in analysis and improvement, and since its new product line was nonetheless within the promotional part.
- XAG has held six rounds of fundraising so far, with buyers together with Baidu Capital and Softbank Imaginative and prescient Fund, an business fund with a state background from Guangzhou. Greater than RMB 300 million was secured by the corporate from GL Ventures, a VC fund beneath Hillhouse Capital Group, in March 2021.
- Within the home market, XAG chooses to advertise its agricultural drones by way of a direct service mannequin, whereas rival DJI cooperates with exterior distributors to promote drones to farmers and agricultural service corporations.
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