M’sian agarwood biotech startup raises RM1.9mil in ECF, aims to accelerate “stagnant” field

Malaysian agarwood biotech company DAdvance Agarwood Solutions Sdn Bhd (DAAS) announced today that it has raised RM1.923 million via an equity crowdfunding (ECF) campaign on Alta (formerly known as Fundnel).

The funding round was led by HLT Land Sdn Bhd, the developer behind a project development in Melaka named Embique, which will feature an agarwood wellness and spa hotel.  

Although formally established in 2019, DAAS boasts 12 years of experience in the cultivation of agarwood.

Its founder, David Liew, has been operating under his own efforts and money since 2008 to formulate bio-vaccines with what is now DAAS’s in-house inoculation techniques.

“We are constantly striving to perfect our vaccine tech for higher resin yields […] and to further elevate Malaysia’s standing as an agarwood producer,” Davis said in the release.

“This is why we strongly believe that this ECF is not only a fundraiser for DAAS, but also something that will benefit the local plantations and the industry as a whole.”

Accelerating agarwood

Typically associated with incense and fragrances, agarwood is a resinous heartwood of infected Acquilara trees.

Its rarity due to depleted wild resources means that agarwood can fetch rather high prices.

However, DAAS has come up with a bio-serum that accelerates the growth of agarwood. Made from organic materials, the bio-serum’s end-products and by-products can be safely deployed within the natural environment.

The all-natural inoculation vaccine (known as the DAdvance Agritech Vaccine) is claimed to help local agarwood plantation owners increase resin yield by 85% per tree.

According to the press release, the company is projected to accumulate approximately 50,000 agarwood trees by the end of 2022 with an estimated value of RM150 million.

DAAS’ funding page also shares that it owns a B2C brand, Nan Yang Chen Xiang, that sells agarwood-based products.

Making full use of the fresh funds

According to the press release, DAAS will use the fresh funds to accelerate research, development, and manufacturing of its in-house inoculation technology. It will also help fulfil the company’s working capital and facilitate marketing activities.

Its funding page states that these marketing efforts will include Facebook advertising, organising events and workshops while further developing long-lasting relationships with its customers.

Moreover, DAAS also aims to use the funds for the expansion of its factory in Ayer Keroh, Melaka. Specifically, the company plans to increase the number of distillation machines from six to 30. This will bring its total output capacity to 30 litres of agarwood oil per month.

“The deployment of these distillation machines is projected to increase the oil output by 500%, which would have a knock-on effect on the company’s overall revenue,” the press release states.

Partnering up to grow the industry

According to the press release, DAAS has recently had a breakthrough with its pure oil quality. Bringing its oil into research centre Bio Aromatik Research Centre’s grade A plus category, DAAS’ oil now complies with the strict guidelines from European and US fragrance industries.

DAAS has also inked a Memorandum of Understanding (MoU) with Tropical Extracts Sdn Bhd, granting them exclusive rights to distribute the agarwood oil to European countries.

Tropical Extracts expects to grow its sales from 30kg of agarwood oil in 2023 to 100kg in 2025, with projections to double the latter figure by 2030.

According to The Malaysian Reserve, Malaysia is the fifth-largest agarwood exporter in the world.

DAAS also aims to kickstart its Agriculture 4.0 project in collaboration with Huawei Technologies (Malaysia) on 150 acres of agarwood plantation in Temerloh, Pahang, with approximately 100,000 agarwood trees.

“This will be the first organisation in Malaysia to implement a full spectrum of Agriculture 4.0 on agarwood plantation through Precision Agriculture Solutions,” the press release stated.

This means the plantation will have intelligent capacitive sensors and hardware for data collection in the plantation such as humidity, climate, soil, and water level to optimise tree growth.

The press release states that DAAS aims to accelerate the “stagnant agarwood industry in Malaysia” through its joint venture business model, whereby DAAS will work with agarwood plantation owners to form an exit plan for their agarwood plantation.

DAAS is also working with players outside of the agarwood scene, teasing plans to collaborate with Union Roastery to create an oud-roasted coffee.

Down the road, the company is looking to launch an agarwood wellness centre, TCM Wellness Culture, through a joint collaboration with a partner that’s yet to be disclosed.

Featured Image Credit: DAdvance Agarwood Solutions