Israeli assault and surveillance drone manufacturer Xtend has completed a $40 million Series B financing round after the drones it has developed have proven their capabilities in the Gaza war in dense urban fighting by IDF units. The company has not disclosed its valuation in the financing round but according to industry sources its valuation has risen to $110 million. Last month Xtend was chosen as one of "Globes" 10 most promising Israeli startups of 2024.
Xtend's drones are distinguished by their intuitive control interfaces, comprising a joystick and reality glasses that transmit live the point of view of the drone. This feature makes the drones easy to use by soldiers accustomed to computer games. Xtent's control interface is also distinctive from its rivals. Instead of maneuvering in space to reach a certain destination, Xtend drones shows a small dot on the screen for the target that allows the operator to aim at, while the drone itself flies autonomously to where requested, weaving through buildings or tunnels and carrying payloads. Another advantage is the modularity of Xtend's drones and their ability to work with an operating system enhancer at the same time, and fly even without GPS reception and to connect to optical fibers.
New investors in the latest financing round include Len Blavatnik's Claltech. Owned by Clal Industries, Claltech has invested in large Israeli tech companies including Verbit, Papaya Global, Vayyar Imaging, Lightricks and Yotpo, and has recorded exits with ironSource and Dynamic Yield. Also participating in the financing round is a large unnamed Japanese financing corporation as well as previous investors the Chartered Group, the Japanese-Singapore investment company of Israeli businessman Eyal Agmoni.
Xtend's drones have been particularly popular with Israeli troops in Gaza where four different types of drones have assisted in various missions such as dropping grenades, surveying tunnels and crashing into terrorists to thwart their attacks. Xtend's drones often help save the lives of soldiers and military dogs. The company's smaller drones are frequently tasked with opening doors of suspicious buildings, and absorbs the fire that would otherwise be aimed at the soldiers.
Xtend operates on a dual use model with the company developing products suitable for both military and commercial markets, in order to increase its market share. In the commercial market, the company serves gas and oil companies that use drones to inspect infrastructure. Xtend's customers include BP and Hyundai, which put up the Israeli drones above their facilities and pipes in rigs and plants to detect potential faults and corrosion in pipelines.
The experience that Xtend has acquired in the Gaza war and in numerous security and civilian activities is being taken to the next level. The company is now developing what it calls an "operating system for robots" linked to hardware that operates as suicide drones. Xtend is striving to be a software company developing a variety of military and civilian robots that can communicate with each other and act as a team or in large swarms. The company's Linux-based operating system draws inspiration from the way Android has taken over a large share of the smartphone market for a large variety of manufacturers. Xtend is also considering setting up a production line in Israel in order to fill the demand gaps for other western militaries.
Xtend cofounder and CEO Aviv Shapira said, "Before the war it was difficult to raise money but suddenly everything has opened up. We decided to wait with the fund raising during the war, and the amount of our orders increased greatly. It is no longer a case of trial and error deals but an order that can include between 1,000 and 5,000 drones at a time. The funding will let us develop in many directions such as establishing partnerships with Japanese electronics companies, developing our own operating system and setting up a production line."
Shapira even calls the round the "last one before the IPO" and according to him the company may consider going public in Japan or on the Nasdaq in the future.
Published by Globes, Israel business news - en.globes.co.il - on May 8, 2024.
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