By Miranda Li
Chinese robot startup Pudu Robotics (普渡科技) reportedly started layoff claiming an unprofitable state of the commercial robot industry.
CEO of the company Zhang Tao issued a letter on July 4 announcing the layoff and said, “To survive, we had to make a decision in a dilemma, after a long discussion, to reshape the company’s business and team.”
The Shenzhen-based commercial service robot maker Pudu Robotics was founded in 2016 and has completed several rounds of financing, with two rounds completed recently.
In May 2021, it completed a round C financing of RMB 500 million ($74.55 million), jointly invested by Tencent, Meituan, and Sequoia Capital. Last September it completed the C2 round of financing jointly financed by Meituan, CGTI Fund, Shenzhen Capital Group Company, and Sequoia China. The company has a cumulative financing amount of C1 and C2 rounds, reaching nearly RMB 1 billion ($149.1 million).
However, Zhang Tao reckoned a cold reception in the whole capital market in his letter, despite the “sunrise industry” of commercial service robots. The commercial robot industry emerged in 2016. In recent years, supported by capital, the valuation of the companies in the robotic sector has soared, but the whole industry has not seen profit yet. With the rapid turn of the capital market and the superimposed impact of the epidemic and macroeconomic cycles, the essence of “making no profit” is more exposed.
In this regard, Zhang claimed in his letter that the company’s business goal in the next six months was to return to the essence of business, improve operating efficiency, and strive to be the first commercial robot company to achieve profitability.
The size of the Pudu team had expanded from 300 at the beginning of 2021 to 3000 at the year-end. By February of 2022, nearly 1000 employees had been laid off, and it was said to have only 500 staff remaining now.
One industry observer commented that it is difficult for startups to develop even with favor from capital investors. Under the influence of the epidemic and the sluggish market, it becomes more challenging.
