Driverless delivery startup Neolix has raised nearly RMB 200 million ($28.7 million) in Series A+ funding to mass-produce its self-driving vehicles, the company said on Wednesday.

Why it matters: China eased restrictions on delivery robots following the Covid-19 outbreak, resulting in a surge in demand for autonomous deliveries in some of the worst-hit areas.

  • The flu-like virus has offered these firms an unprecedented opportunity to put their technology through its paces as Beijing promoted “contactless deliveries” to curb the spread of the disease.
  • Neolix began mass production of its Level 4 delivery robots last year, counting companies including Huawei, JD.com, and Alibaba as customers.

Details: Neolix’s latest round of funding, which it closed in February and announced this week, is led by electric vehicle maker and existing investor Lixiang. The company is now Neolix’s second-largest shareholder after CEO Yu Enyuan.

  • Meanwhile, Addor Capital, as well as previous investors Glory Ventures and Yunqi Partners, also took part in the round.
  • The company plans to use the proceeds to ramp up production and operations of its delivery robots, with the new round coming less than a year after Neolix’s RMB 100 Series A.
  • The company said in a statement that it expects to close another new investment in 2020.
  • Neolix has a production facility in the eastern Chinese city of Changzhou and aims to sell 100,000 vehicles a year in the next four years, according to Bloomberg.
  • The company’s primary focus is food delivery, mobile retail, and security applications—in cooperation with local governments.
  • Neolix has produced 225 delivery robots in the two years since it was founded, the company said.

Context: While Covid-19 has thrown delivery robots into the spotlight, the technology still faces technical and regulatory hurdles.

  • The Chinese government has allowed lifestyle services platform Meituan and e-commerce giant JD.com to run their autonomous delivery services, but many companies are still only permitted to operate within geofenced areas.
  • The unpredictable nature of traffic and pedestrians, especially on small, congested roads, present significant challenges to wider adoption.
  • Nevertheless, Alibaba founder Jack Ma predicts that within a decade more than 1 billion packages could be delivered by driverless vehicles daily in China.

Chris Udemans

Christopher Udemans is a Shanghai-based technology reporter. He covers Chinese artificial intelligence, mobility, and cybersecurity. You can contact him at chrisudemans [at] technode [dot] com.

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