This article by Nina Xiang originally appeared on China Money Network, the best data intelligence platform tracking China’s tech and venture capital markets (access requires subscription).
An experienced and robust founding team. A series of rapid venture investments. A mere thirteen-month period for an idea to turn into the first product shipment in an emerging and promising new market. These are the development trajectories of an early-stage logistics robot startup in Shenzhen that pretty much sums up the reasons why China is winning the global innovation race.
Syrius Robotics was founded in May 2018 by Adam Jiang, with work experience at Motorola and Nvidia; Luo Xuan, who was previously at Alibaba Robotics; and Liu Junbin, who has a PhD in electrical engineering and computer sciences. The company makes autonomous mobile robots, a new generation of logistics robots that are more agile, intelligent and economical.
It took Syrius six months to design its first model of AMRs, and in another seven months it shipped its first batch of products to a client in Japan. This feat was achieved with the help of two VC financing deals: an angel round led by Future Capital and a pre-A round led by ZhenFund in the span of eight months.
This is China speed, which is one of the key drivers enabling Chinese startups to win new clients globally. “Shenzhen’s ecosystems are more mature, especially in electronics. Plus, we know the factories and people very well,” co-founder Luo Xuan told China Money Network last month at the company’s Shenzhen office.
In addition, Chinese startups enjoy their traditional competitive edge in low costs and prices. Syrius’s AMRs cost only around 20% of its global peer, Locus Robotics. For example, Syrius uses LIDAR sensors that are made in China and cost only a fraction of those made in developed markets. “Our core competitiveness is in our algorithms, so we don’t have to rely on the quality of our hardware,” Luo said.
When people hear about logistics robots, the first thing that comes to mind is usually Kiva Systems, an automated guided vehicle company acquired by Amazon five years ago. These robots move around the warehouse guided by marked lines or wires on the floor. They can lift and move shelves of products around the warehouse. AMRs, on the other hand, use sensors to detect the environment and move around the warehouse with a higher degree of flexibility. They can carry individuals boxes of products and are more suitable for moving smaller amounts of goods.
AMRs offer a more flexible solution to the product movement problem at warehouses. Most important, AMRs are more economical. Unlike AGVs, which require installing infrastructure such as the lines on the floor or redesigning warehouses for deployment, AMRs can be deployed directly to any warehouse at any scale. In smaller warehouses, for example, a number of AMRs can be deployed for only the cost of the robots themselves.
As such, the AMR market is expected to grow faster than AGVs. The global AGV market was valued at $2.49 billion in 2018 and is projected to expand at a CAGR of 15.8% from 2019 to 2025, according to Grand View Research. The global AMR market, on the other hand, will grow at CAGR of 24% annually to add $8.47 billion in market value during 2018 to 2022, Technavio estimates.
But startups in China also face unique challenges. Syrius is focusing on overseas clients initially because payment cycles are too long in China, Luo said. It is also easy for other teams in China to copy product ideas and take market share based on strong government relationships.
Being original is still not the strength of Chinese startups. Syrius’s products are very similar to those of Locus Robotics, which was founded in 2014 with offices in India and the United States, backed by DHL and other investors.
Though Syrius may have taken some inspirations from other companies, it is trying to build a differentiated product by giving its robots stronger abilities to sense its environment and better self-learning capabilities. “Our key driver is to bring disruptive changes [to the industry] from the perspective of costs and stability,” Luo said. This is why we started.”