The robotics division of a major electric vehicle manufacturer has secured over $900 million in its initial funding round, setting a new record for a Chinese company specializing in embodied intelligence and valuing the business at more than $6.3 billion.
The funding round was led by IDG Capital, with participation from Gaorong Ventures, as disclosed in a recent stock exchange filing. Strategic investors including Tencent Holdings and Alibaba Group Holding also provided support for the company.
“This investment will bring in globally recognized investment institutions and strategic partners to fuel our robotics division’s rapid growth and maintain our leadership in the field,” stated the company’s founder and chairman. “It will also help attract top talent in physical AI from around the world.”
The outside investors contributed approximately $600 million, while the company itself invested $200 million. The remaining funds came from entities controlled by the company’s executives, including its chairman. Post-funding, the company will hold about 82% ownership of the robotics subsidiary, which could decrease to around 68.4% if the executives exercise their additional warrants.
The funds will primarily be used for advancing the development of the subsidiary’s software and hardware, training physical artificial intelligence models, gathering high-quality data, establishing full-scale production facilities, and expanding the company’s global commercial reach.
Similar to Tesla and other Chinese automakers like GAC Group and Changan Automobile, this company believes that the technology and manufacturing processes developed for intelligent new energy vehicles provide an edge in the competitive race to commercialize humanoid robots. The Guangzhou-based firm introduced its first humanoid robot towards the end of 2023, with an automotive-grade Iron android scheduled for release in late 2024.
‘Solid Foundation’
“By leveraging over a decade of experience in R&D, supply chain management, and manufacturing in the smart NEV (new energy vehicle) sector, we are systematically transferring that expertise to our robotics business,” said Gaorong Ventures. “This lays a strong groundwork for the industrialization of humanoid robots.”
The venture capital firm based in Beijing also expressed eagerness to collaborate on bringing China’s innovations in physical AI to the global market.
The Guangzhou factory producing the Iron humanoid robot recently commenced small-scale trial production last month and aims for mass manufacturing by year’s end. Initially, these robots will be deployed in retail outlets and various commercial environments, with deliveries starting in China and internationally next year.
The Iron robot is a highly advanced humanoid designed to closely mimic human behavior, driven by artificial intelligence and built with rigorous safety and quality standards. Its mission is to become a versatile, next-generation android capable of supporting numerous applications and self-improvement in real-world settings.
Following the announcement, the company’s shares listed in Hong Kong declined by 9.2%, closing at HKD 43.30 (around USD 5.52). This drop coincided with a recent earnings report indicating the company’s second-quarter loss nearly tripled, and a less optimistic outlook for the third quarter.
For the three months ending June 30, the net loss expanded 179% year-over-year to approximately CNY 1.3 billion (USD 199.3 million), while revenue increased by 8% to about CNY 19.7 billion (USD 2.9 billion). Vehicle deliveries grew slightly to 103,295 units, with sales reaching CNY 17.1 billion.
Looking ahead, the company projects delivering between 115,000 and 121,000 vehicles in the current quarter, which is below market estimates of around 147,000 units. Revenue forecasts for this period are between CNY 21.7 billion and CNY 23.4 billion, also falling short of expectations.