Chinese industrial robot maker Jaka Robot said on Monday it has raised $15 million in its Series B fundraising and aims to expand as the world's second largest economy sets sights on upgrading the advanced manufacturing sector.
Asian private equity firm led the round of funding, the Shanghai-based startup said in a statement without disclosing the identity of other investors. Monday's funding came about a year after its Rmb75 million ($11.2 million) Series A fundraising.
Jaka said the proceed this year will be used to expand its sales both domestically and internationally, with more focus on consumer electronics, medical instrument and car component manufacturing.
Founded in 2014, Jaka aims to design cooperative robots – referring to those able to interact with other robots – that replaces the role of certain human workers during manufacturing and production. Its main product is a robot arm equipped with flexible joints and has smart features like visual identification and action learning.
Industrial robots are a fast-growing sector over the past five years. According to data from the International Federation of Robotics, sales volume of industrial robots grew 30% year-on-year in 2018 to a record 381,000 units. The figure is expected to double in two years’ time.
Despite operating in an expanding segment, robot makers need to find the right angle to provide the product that suits the market. Rethink Robotics, a robotic company backed by Amazon founder Jeff Bezos, taught others a bitter lesson as it went bankrupt last year.
Bezos invested a total $111 million in Rethink Robotics from 2008 to 2017, helping the US startup to develop its cooperative robotic arm. Unfortunately, the cooperative robot proved to be too aggressive on adding new features without adapting to each production line.
The result was dramatic. Rethink only sold about 2,500 robots in 10 years, and the company finally shut down in October last year.
While Jaka did not disclose its sales volume, the comapny said its revenue reached about $29.7 million last year and about 40% came from direct robot sales.
“We should learn from the failure of Rethink,” Jaka's CEO Li Mingyang told FinanceAsia in an interview. “One thing we must remember, that a product is always made for application. This is also a standard in our operations.”
To match their product with the actual demand, Jaka specifically designed its product for some fast-developing sectors in China, including automobile component, battery and medical instrument manufacturing.
The Chinese startup aims to develop faster this year as China trying to accerlerate the manufacturing industry with a tax cut.
Jaka is also developing an open platform for cooperative robots and manufacturers. With the help of the platform, Jaka can make its products more compatible and can be applied in more applications.
The number of robots sold in China between 2016 and 2017 was higher than Europe and the Americas combined, according to International Federation of Robotics.
But while China experienced rapid growth of industrial robot sales in 2017, the total market share for local robot suppliers has fallen that year – a signal that international robot makers were expanding quicker than local brands.
In face of stiff competition from international brands, Jaka said it will further raise funds for market expansion and technology upgrade.
China Renaissance is the financial advisor in Jaka's latest fundraising.
