Struggling Pudu Robotics given new lease on life with US$14m in Series C3 funding
Pudu Robotics (普渡科技), a delivery robot startup based in China’s tech hub Shenzhen, recently completed a Series C3 round of financing worth more than 100 million yuan (US$14.6 million), backed solely by Puhua Capital.
This round came six months after Pudu, mired in losses, announced massive layoffs and cuts to business lines in 2022.
It’s unclear how Pudu managed to attract venture funds again and at what valuation it closed Series C3, and on what terms.
To date, Pudu has completed six rounds of funding, with the aggregate amount reaching over 1.3 billion yuan. It counts among its investors Tencent, Sequoia China, Meituan, Shenzhen Investment Holdings Co. Ltd, and China Greater Bay Area Homeland Investments Limited.
In the Series C1 and C2 rounds, Pudu secured a staggering 1 billion yuan and roped in big-name financial backers like Tencent, Meituan and Sequoia China, data from 36Kr show.
According to media reports, proceeds from the latest Series C3 round will be primarily used to build a new manufacturing base and expand production capacity, and also to develop robot vacuum cleaners for commercial use.
Robot vacuum cleaner will be a new addition to Pudu’s product mix since the company used to focus on delivery, bussing and disinfection robots, a domain teeming with competitors like Keenon Robotics (擎朗智能), Yunji Technology (云迹科技), Excelland AI (优地科技) and Orion Star (猎户星空).
Pudu’s products are widely utilized in restaurants, hospitals, schools, office buildings, government halls, web cafes, Karaoke bars, airports and metro stations. Its major clients include Haidilao, Xiabuxiabu, JD, Country Garden, IHG group and Sheraton.
After six years of development, Pudu has supplied hundreds of establishments with its robots and services, spanning 60-plus countries and regions across the world. Its shipments totaled more than 53,000 units.
Nevertheless, Pudu’s new strategy of diversification — to venture into the commercial vacuum cleaner space — could still face headwinds as this sector is also rife with competition from even bigger, deep-pocketed rivals such as Ecovacs (科沃斯, 603486.SH), Roborock (石头科技, 688169.SH) and Gaussian Robot (高仙机器人).
Pudu’s mayhem became public in July last year, when its founder and CEO Zhang Tao, a Hong Kong University of Science and Technology alumnus and an editor-turned-entrepreneur, surprised the tech community with an eye-popping internal letter in July 2022.
In the letter, which was leaked online, he announced an aggressive “fat-shedding” plan to stem losses, whereby the cash-strapped firm decided to lay off some 1,000 employees, or 30%, of its staff.
He blamed the firm’s severe cash crunch on a string of ill-informed management decisions. After self-reflection among executives, the firm decided on a return to the basics of operational efficiency, in a bid to become the industry’s first lucrative commercial-use robotic company, Zhang wrote then.
China’s commercial robot sector began to prosper in 2016 and experienced high growth rates around 2020. With huge sums of venture capital flowing into this space, Zhang predicted the emergence of multiple unicorns valued at US$1 billion to US$2 billion in the letter last year.
The industry, despite its boom, has a big test in front of it. None of the players are currently lucrative. And as global equity financing climate worsens amid rising geopolitical tensions and heightened economic uncertainties, funding began to dry up for businesses that have yet to turn a profit or prove their business models.