Chinese Robot Startup Reaps Rewards After High-Profile Race

Yahoo

a day ago

(Bloomberg) -- Just a few months ago, Noetix Robotics was struggling to find a single customer for its Hobbit-sized robots. Founder Jiang Zheyuan was nervous about burning through investors' money quickly. Then one of its N2 models placed second in the world's first half-marathon for robots.
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Now, the Beijing startup founded by the 27-year-old Tsinghua dropout is on track to deliver 2,000 robots by the end of the year. It's in talks to raise roughly $35 million at a $200 million valuation — about as much funding as it's secured since its inception in 2023. The company's staff has doubled to 100, with half of them working on a newly built production floor that churns out 10 bots per day, Jiang said in an interview.
'Most of our robots are sold after the marathon race,' Jiang told Bloomberg Television. 'The financial status of our company will be way better.'
Noetix has undergone a profound transformation since the April race, which was broadcast across China. Its N2 robot, which costs about $6,000, accomplished what most of the field couldn't — it actually finished the race. The ensuing publicity drew interest from investors as well as a wide range of customers, from event planners to museums and research institutes. Prospective sales partners in Europe and the Middle East have also taken note.
The startup's turnaround is emblematic of China's ambition to dominate the AI robot boom, part of President Xi Jinping's drive to reduce reliance on foreign technologies. Domestic leaders like Unitree and EngineAI are prepping their two-legged bots for increasingly complex roles, ranging from sorting garbage to patrolling the streets. Just this month, Hangzhou-based Unitree — whose founder attended a key meeting with Xi this year — received funding from investors including Tencent Holdings Ltd., Alibaba Group Holding Ltd., and a ByteDance Ltd.-backed venture firm.
As the underdog, Noetix has to undercut its much more affluent rivals, Jiang said. The N2 is sold at less than half the rate of Unitree's popular G1 model, meaning Noetix has a below-market gross margin of just over 20%. Jiang likens this strategy to the early days of smartphone giant Xiaomi Corp., which lured away Chinese users of Apple Inc.'s iPhone with its budget handsets.
Noetix is planning to open two new factories as it looks to ramp up production to 10,000 robots next year. The economies of scale could push the price even lower to eventually let every household afford a humanoid, its founder said.
At the company's offices in Beijing's northern suburb of Changping, visitors are made to cover their phone cameras with a sticker. Jiang said he suspected IP theft after his back-flipping, marathon-racing bots shot to fame.
Two years ago, the electronics engineer abandoned his PhD at China's top college to found Noetix with a high-school classmate. Last year, Noetix neared bankruptcy after Jiang got ahead of himself in expansion. But he's now more prudent on cost controls, while maintaining at least two years of cash runway and targeting a public listing in Hong Kong as soon as 2026. 'I can't just spend recklessly,' he said. Quitting his PhD was the right decision, he added, otherwise he might fall back on that as a safety net.
Jiang has since raised money from some local governments and venture firms like Innoangel Fund. But Noetix still needs a contingency plan to deal with worsening tensions between the US and China. While most of the N2's components are made in China, Jiang's bots are powered by semiconductor chips from Intel Corp and STMicroelectronics NV. He's already sourced domestic substitutes in case of further US export controls. 'We are thinking about the extreme situation and we are having a plan B for that situation,' he said.
Fresh off the marathon race, Noetix is already prepping its bots — including a yet-to-launch taller model to compliment the waist-height N2 — for a bigger sports event. In less than two months, they will compete at Beijing's Bird's Nest national stadium against other humanoids in gymnastics and track and field events.
--With assistance from Jessica Sui.
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