Alta Malaysia provided access for retail investors on its ECF platform to invest in Malaysian agarwood biotech company DAdvance Agarwood Solutions Sdn Bhd (DAAS), surpassing initial targets to support the company's expansion efforts.
With 12 years of extensive experience in the agarwood industry, DAdvance has successfully developed a proprietary bio-serum formula to optimize the productivity of agarwood resin cultivation. Fully authorized by the Malaysian Timber Industry Board (“MTIB”), the company has also been recognized as one of the leading SMEs in Malaysia’s 15th annual Golden Bull Award —a prestigious business award for Malaysian SMEs.
According to Business Insider’s article “First-grade agarwood can cost as much as $100,000 per kilogram. Why is it so expensive?”, the global market size for agarwood products is valued at USD32bn — a number that is expected to double to USD 69bn by 2029. This is because the significant demand for agarwood resin completely overwhelms its limited supply. Due to prolonged scarcity, agarwood’s price can reach up to USD100k per kilogram, making it one of the most expensive raw materials in the world.
"...the global market size for agarwood products is valued at USD32bn — a number that is expected to double to USD 69bn by 2029."
DAdvance — Bringing a new solution to the market
DAdvance had spent considerable time and effort to develop a proprietary bio-serum inoculation engineering technique which has been scientifically proven to maximise the yield of agarwood resin up to 85% per tree. To date, DAdvance has inoculated over 1,089 agarwood trees and they are in the midst of inoculating another 13,000 trees.
Additionally, with their expertise in the agarwood industry, DAdvance also offers other services which include agarwood plantation management, tree sapling and plant processing. They are currently managing over 10,000 agarwood trees across Peninsular Malaysia which are mainly located in Negeri Sembilan, Kedah and Melaka.
Diverse revenue streams and promising traction
DAdvance’s B2C revenue stream consists of production and trading of agarwood-based products under its Nan Yang Chen Xiang《南洋沉香》brand. Meanwhile, the company’s B2B revenue stream consists of trading of agricultural by-products such as wood chips, hydrosol water and oil.
Since September 2020, DAdvance has acquired over 1,115 customers under their Nan Yang Chen Xiang《南洋沉香》(“NYCX”) brand in Malaysia alone, primarily through its online distributors via its “Retailing Partner Program.” In addition to this, NYCX has successfully expanded its presence in other regions including Singapore, China, and Hong Kong.
DAdvance has recorded a revenue of MYR60k in 2020, and has seen an impressive increase in revenue of more than 300% in 2021 so far. In addition to this, they recorded MYR100k in revenue in the last 3 months itself. While its revenue is mainly generated from B2C sales today, the company forecasts that B2B sales will exceed B2C sales by 2022, as it seeks to partner with essential oil and aromatherapy companies in China and Europe. The company has invested heavily into its bio-serum manufacturing, which is expected to be paid off in future upon harvest of the resin.
Fundraising for continuous business growth
For this fundraise, Alta offered an exclusive opportunity for retail investors on its equity crowdfunding (“ECF”) platform to invest in DAdvance Agarwood.
Additionally, Alta supported this fundraise though roadshows and Facebook live events, achieving close to 400% of the minimum fundraising target within 3 months, leading to Alta successfully raising MYR 1.92M for DAdvance.
DAdvance are using the funds raised to scale up production at their Ayer Keroh factory in Melaka. By increasing the number of distillation machines, they predict production output will increase by 500% a month, or up to 30 litres of agarwood oil.
DAdvance recently inked an MoU with Tropical Extracts Sdn Bhd, an agarwood oil supplier, which will give them exclusive distribution rights on behalf of the company in Europe. This is especially lucrative as Tropical Extracts seeks to grow their annual output from 30kg in 2023 to 100kg in 2025.
"Alta supported this fundraise though roadshows and Facebook live events, achieving close to 400% of the minimum fundraising target within 3 months, leading to Alta successfully raising MYR 1.92M for DAdvance."
The company also has various other collaborations in the pipeline. Their vanguard agriculture 4.0 project with Huawei Technologies on a 150,000-acre agarwood plantation in Temerloh, Pahang, aims to use capacitive sensors and other intelligent hardware to enhance data collection through the production process.
DAdvance is also in the early stages of exploring the possibility of launching an agarwood wellness centre, through collaboration alongside their upcoming business partners.
Alta was involved in the end-to-end process of the fundraising, leading a fundraising campaign that garnered strong investor interest, contributing to the successful closing of DAdvance Agarwood’s round of fundraising via ECF.
Additionally, Alta brought the opportunity to our wide retail investment network through our ECF platform, creating access for smaller-ticket retail investors.
Contact us today to know more about the ECF deals on Alta Malaysia.