(Yicai Global) March 27 -- Xi'an Skye Intelligence Ltd., the unmanned aerial vehicle manufacturer which made waves at the 2016 Consumer Electronics Show, has closed after struggling with finance and low product sales.
"UAV production costs are very high, and paired with the high rate of non-compliant products it's difficult to sell them," a former employee told National Business Daily. "Negotiations for finance had been underway for half a year, but in the end were unsuccessful."
The drone maker was founded in 2015, its UAV with high-precision hover cameras captured widespread attention at the 2016 CES but was unable to resolve the firm's financial problems. Reports say an internal document read "Skye has reached a framework of investment intentions with the current round of two investors. Due to a relatively cold market environment, slow progress made on the products, and poor fund management, among other factors, cash flow has recently seen some problems." Employees say the firm still owes them wages.
The UAV industry has seen a flurry of problems since the second half of last year, with America's Lily Robotics going bust and Chinese manufacturers Ehang Intelligent Technology Co., Zero Tech Beijing Intelligent Technology Co. and other companies announcing layoffs.
In the third quarter of last year, the industry received just 13 investments totaling USD55 million, according to a report from KPMG and CB Insights. Down by almost half from the 13 investments worth USD106 million in the second quarter and an even steeper decline from the USD134 million invested in the third quarter of 2015.