[Report] Emerging IoT Startups In China

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This iSTOX Insights Report is the first of a two-part series on China's enterprise and productivity tech startup scene. In this report we explore China's burgeoning Internet of Things (IoT) sector. This report was produced by Lightstream Research and commissioned by iSTOX.

Executive summary

China is currently leading the Internet of Things (IoT) race, supported by the efforts of its telco providers, the government, and early adoption of 5G. Estimates by various consultancy and industry bodies expect China’s IoT industry to grow at a stronger rate over the forecast period (c. 27% compound annual growth rate (CAGR) over 2019-2025), surpassing US spending on IoT.

A growing focus on Industrial IoT (IIoT) has become a key trend in the Chinese IoT industry. Initially, IoT was mainly adopted by the consumer sector, particularly in developing smart devices and smart homes. Given the country’s large manufacturing base, IIoT is seen as a sector with the highest growth potential for IoT services. IIoT is still in its nascent stage and we believe that China is well-positioned for growth in this sector.

We have identified seventeen emerging IoT companies across key IoT application areas: smart device, home, city and building, IoT and cloud platform, manufacturing and IIoT, automotive and transportation systems and other IoT solutions. Based on industry estimates, IoT and cloud platforms are areas which are likely to witness the highest growth rates over the medium term. Over the longer term, however, we believe that manufacturing and IIoT-related companies will enjoy the strongest growth rates as manufacturers start adopting IoT services throughout their production processes. In terms of IoT platform services, the two names of interest are Gizwits and China Mobile IoT. On the manufacturing and IIoT side, we believe that RootCloud and Thingple have attractive potential for growth. In the smart devices and homes application segment, Yeelink and Tuya Smart caught our attention for their continued efforts in developing product technologies to meet growing IoT needs. In the automotive and transportation systems segment, Roadstar.ai, Deeproute.ai and Uhnder have caught our attention for their efforts in developing technologies for autonomous driving.

Overview: China Leading the IoT Race


IoT has grown to a great extent in China following the Made in China 2025 plan and Internet Plus roadmap, which led to Chinese telecommunication players increasingly investing in expanding the connectedness of mobile networks. Made in China 2025 is a strategic plan that was initiated in 2025 to reduce China’s dependence on foreign technology and promote Chinese technological manufacturers in the global marketplace. The Internet Plus roadmap is a five-year plan to integrate cloud-computing, big data and IoT across a variety of industries to build an innovation led economy. China is still lagging behind the US in terms of investment, though China has invested more than European countries. Overall consensus estimates are for the IoT industry to grow at a stronger rate over the forecast period (2019-2025), suggesting high growth potential for companies in this sector. Given that 5G will first be deployed in China, it is likely to further support faster growth in IoT in China than in the West. According to IDC consultancy and various other similar forecasts, China is expected to spend $300 billion annually on IoT and surpass the United States as the world's largest IoT market by 2022.

Telco Providers’ Efforts Key for IoT Development

Mobile IoT has been a key factor driving IoT development in the early years. Mobile IoT technologies use a licensed spectrum to provide low power wide area (LPWA) connectivity, necessary for connecting devices, especially those devices that need to have long battery lives and only transmit small amounts of data. This connectivity technology was developed to support IoT solutions such as industrial asset tracking, safety monitoring, or water and gas metering. Mobile network providers have continued to invest in these key technologies which are necessary for applying IoT across various applications in the country (Source: A GSMA Internet of Things Report July 2018). Mobile IoT networks use either Narrowband IoT (NBIoT) or LTE-M technologies, both of which have been standardised by 3GPP (The 3rd Generation Partnership Project.

Government Support Has Been Key for the Sector’s Growth

China's IoT progress is backed by its Internet Plus roadmap. This strategy aims to integrate the country’s cloud computing, mobile Internet, big data, and IoT initiatives to promote an extensive application of smart technologies.

The Chinese government also outlined its ‘Made in China 2025’ strategy in 2015 to boost manufacturing innovation. IoT was one of the key areas of focus across the plan.

Apart from these plans set back in 2015, the government has continued to offer other general support to grow the IoT sector.

Core Areas of IoT: IIoT Is the New Focus

Though most of the early efforts by telco providers were towards consumer IoT applications, the focus has now shifted towards industrial IoT. According to analysis by Accenture, IoT could add US$196bn to the cumulative GDP in manufacturing industries alone over the next 15 years. The manufacturing industry stands to benefit the most from IoT in terms of economic benefits. According to Accenture estimates, of the impact of IoT on twelve key industrial sectors, the manufacturing, public services, and resources industries are expected to account for more than 60% of the IoT’s total cumulative impact on China’s GDP by 2030. Other industrial and organisational applications like the agriculture, healthcare, education, and transportation industries are likely to generate relatively small additions to the cumulative GDP from IoT due to their relatively small sizes.

According to a survey conducted by Deloitte on Smart Manufacturing Enterprise, as of 2018, a majority of IoT applications have been towards Electronics (mainly consumer applications).

Emerging IoT Companies

The most popular area of IoT application appears to be smart devices, homes, and buildings. IoT cloud and platforms services and IIoT are also gradually growing in China. For each of the above areas, we have identified a few emerging players.


Consumer IoT: Smart Devices, Smart Home, City and Building

Yeelink

http://www.yeelink.net/

Founded in 2012, Yeelink’s key products are Smart Lighting, that is Internet-enabled lighting that works with smartphones and wearable devices. The company also provides a unified IoT data service interface where users can customise, remotely manage, and control their home devices.

The company generated RMB100m in sales revenue in overseas markets in 2019, which accounted for c. 10% of the company's revenue. The number of users connecting Yeelight devices to Google Assistant increased from 28,000 in 2018 to nearly 350,000 in 1H2020.

The company sells all of its products through Xiaomi’s network to minimise distribution fees and uses Xiaomi’s ecommerce site to bargain with manufacturers. Xiaomi also provides product expertise to the company.

Horizon Robotics

https://en.horizon.ai/

Founded in 2015, Horizon provides smart devices in the IoT sector. The company has developed the Brain Processor Unit (BPU), an innovative AI computing architecture, on top of which the company can provide comprehensive solutions which are high-performance, low-power, and cost-effective.

The company collaborated with SK Telecom to jointly demonstrate Level 4 autonomous driving solutions, HD update solutions, and ADAS (Advanced Driver Assistance System) devices. Horizon also has collaborated with Audi, Chang'An, Bosch, SK Telecom, DeepMap, and Faurecia for the development of hardware and software required by the companies for autonomous driving.

Kai Yu stated that since the release of the Journey and Sunrise chips, the company's revenue in 2018 reached RMB100m, an increase of over 10x compared to 2017.

To further boost revenue growth, under its “AI on Horizon” strategy launched in 2019, Horizon Robotics will focus on constructing the basic technology platform consisting of edge AI chips and toolchain. The company will position itself as Tier 2, whereby it will not compete with everyone at the bottom of the industry chain (system integration, application, and customer data). The company is at the forefront of enabling autonomous driving for the Auto industry, but also has exposure to other industries like retail and education.

BroadLink

https://ibroadlink.com/

Founded in 2013, BroadLink focuses on applying AI+IoT to offer solutions and services in the fields of smart single products, home interconnection, smart real estate, smart hotels, smart homes, and smart elderly care.

Currently, the annual sales volume of self-developed smart single products exceeds 5m pieces; the annual shipment volume of smart modules exceeds 35 m pieces, and the customers cover all the mainstream electrical appliances brands on the market.

At present, the BroadLink DNA interoperability platform has become one of the world's largest IoT PaaS platforms, leading the world in the field of AI combined with IoT. According to tradewheel.com, the company generates revenues between US$10m-50m. Broadlink helps traditional companies transform to the smart world through its products that can solve problems such as understanding learning manuals, choosing apps, long on-boarding processes, and excessive permission requirements.

Lifesmart

http://global.ilifesmart.com/about/index.html

Founded in 2011, Lifesmart offers complete categories of smart devices, integrating advanced IoT technologies and cloud services to form the base of both smart home solutions and other industrial solutions. Customers include real estate partners such as Agile, Jinmao and Xiangsheng Group, and Telecom carriers including China Mobile, FiberHome, China Telecom and China Unicom. Tencent, Baidu, Huawei, Xiaomi are also clients.

Lifesmart is the 1stsmart home brand available online in China, beyond which it serves a large customer base by adding products into the real estate industry as a standard installation. The company also engages in collaborative projects with companies such as Alibaba and Baidu to solve the growing energy issue in Europe.

Platforms: IoT and Cloud Platforms

Tuya Smart

https://www.tuya.com/

Founded in 2014, Tuya operates an IoT cloud platform that provides a unique, all-in-one offering of cloud + connectivity + app, which simplifies the process for customers to make their products smart.

By the end of October 2020, the Tuya IoT development platform had served over 230,000 developers around the world, a 28% increase year-on-year. The platform has smart-enabled more than 200,000 products in nearly 1,000 categories, a 122% YoY increase. According to Growjo.com, the company currently earns an annual revenue of c. US$22.2m.

Tuya also maintains partnerships with Schneider Electric, Samsung Smart Things, Google, Microsoft, and Amazon.

The claimed core strategy of the company in 2020 is to open its platform to create fertile soil for AIoT developers, which could likely expand the number of products available. In 2020, the company launched an Open AI+ IoT+ Cloud development platform to further its strategy, and IoT developers will be able to utilise the Tuya platform for the cloud manufacturing, community SaaS, and global B2B smart business industries.

Gizwits

http://en.gizwits.com/about-us

Founded in 2010, it is an IoT development platform and cloud service provider. Gizwits has close ties with large and globally-renowned brands such as Microsoft, Amazon, Qualcomm and Intel, along with Chinese companies such as Vodafone, China Telecom, China Mobile, and China Unicom. With China’s large scale IoT adoption, Gizwit can use these partnerships to ensure that the brands use the company’s solutions in adopting IoT for their respective companies. For example, the company’s IoT solutions can also aid the FMCG industry, which relies heavily on physical stores, by optimising their operations and providing better insights. It is through this strategy that Gizwits aims to become China’s new tech giant.

The company has served thousands of corporate customers as well, including many Fortune 500 companies such as Bosch, Siemens, Honeywell, Fujitsu, 3M and the Daimler Group.

Orvibo

https://www.orvibo.com/en/index.html

Founded in 2011, Orvibo provides smart home solutions with strengths in IoT, AI, and cloud computing. We believe that given the company’s security leak in 2019, Orvibo would now focus more on improving quality control to regain customer confidence.

Shanghai MXCHIP Information Technology Co., Ltd.

https://en.mxchip.com/about_us

Founded in 2010, provides enterprise customers with hardware products and intelligent solutions for various scenarios.

MXCHIP’s hardware solutions have brought recognition as an established player for IoT hardware. The company has partnered with software companies to develop reliable and low-cost IoT solutions to build a reputation as a reliable hardware company. For example, Microsoft has been partnering with the company since 2017 to develop IoT solutions. The partnership worked towards developing a low-cost solution for starting with IoT/ cloud integration, which largely aided the company’s image of being a reliable, low- cost hardware solutions provider.  The company has also partnered with a large number of companies with key names being ARM, Suning, AWS, IBM, Haier, Philips and Panasonic, to mainly allow the company to offer a complete IoT service ecosystem which enables customers to build the next generation of IoT connected devices.

Ayla Network China

https://www.aylanetworks.com/

Founded in 2010, the company operates a cloud platform service business in the IoT sector. The company's IoT platform is offered as a managed cloud PaaS with Ayla's flexibility and modularity allowing quick changes to be made to almost any point of the platform at any time.

In December 2019, Ayla Networks reported that its revenue has grown more than 2000% since 2014. The company also claims to have doubled its transaction volume on the IoT cloud platform in 2017 and 2018.

Ayla has selected Sunsea Telecommunications as its joint venture partner in China. Sunsea entered into a strategic partnership with China Telecom to co-develop end-to-end smart IoT solutions based on Ayla’s technology. Furthermore, a collaboration model between China Mobile and Sunsea, based on the Ayla platform, are also being explored. Ayla Networks also signed a strategic cooperation agreement with China Unicom to develop solutions for the smart home and other IoT markets.

Apart from this, the company has also partnered with Amazon web services, AzureWave, Google Cloud, IBM, Qualcomm, Toshiba, and Tencent. Key customers include Hisense, Hunter, Fujitsu, and Midea.

Manufacturing & Industrial IoT

RootCloud

https://en.rootcloud.com/

Founded in 2016, RootCloud provides cloud services based on IIoT and big data for enterprises in various industries. The company serves around 81 industry verticals and operates beyond China, with services in Germany, India, Kenya, South Africa, Indonesia, and Mexico.

The company sells its products directly to end-users as well as to OEMs. It appears that the company partners mainly with OEMs to boost the usage of its product and services. By partnering globally with clients, the company has expanded its reach beyond China. The company has key partnerships with Telenor, AUEASE, and AWS.

Most of the company’s clients appear to be from the construction machinery industry. The company’s key competitors include Huawei Cloud, Inspur Group, and Siemens.


Thingple Inc

https://www.thingple.com/

Founded in 2014, Thingple engages in the development of UHF RFID products and applications designed for high-metal, high-complexity industrial environments. Its clients are mainly from the gas, chemical, and manufacturing industries. The company’s key technologies include: RFID + Reader (for Asset tracking and management) and Sensors + LoRaWAN (mainly for environment and equipment monitoring).

For a start-up, the company has managed to sign quite a number of clients including British American Tobacco, Baosteel Gases, BASF, Suez, etc.

The company’s RFID technology focuses on using IIoT and it appears that with China’s large manufacturing industry, Thingple’s IoT-based RFID product could witness continued demand.

Automotive and Transportation Systems

Immotor

https://www.ehuandian.net/

Founded in 2016, Immotor develops and sells portable and personal transport systems. The company runs one of the largest battery networks for two-wheel electric scooters in China and has launched Immotor Go, a high-performance light electric vehicle (LEV) that is fully integrated with users’ smartphones and powered by a patented “Super battery.”

While the company’s core technology is its intelligent battery network, the scooters can use an app to track a battery swapping cabinet nearby, where they can swap the depleted battery to a fully charged one. Around 7,000 Immotor battery swapping cabinets have been deployed in over 54 cities. Immotor has decided to partner with overseas local players for implementation using its technology, products and business model. These countries include India, Vietnam, Thailand and other Southeast Asian countries.

Uhnder

https://www.uhnder.com/

Founded in 2015, Uhnder has developed a digital automotive radar-on-chip which is applied in self-driving, especially for the Automatic Emergency Braking (AEB) and Adoptive Cruise Control (ACC) functions. The company’s digital 4D software-defining imaging radar technology is claimed to work better than analog radar technology and provides improved resolution and detection capabilities.

The company is purely a radar company which signifies that it not only builds the chips but also the full sensor, module and software structure, which also acts as its competitive advantage.

The company’s first customer was Magna who used the chip to develop its ICON RADAR which provides precise detection, extensive range and high resiliency. In December 2020, Uhnder partnered with customer Sensata Technologies who plans to use Uhnder’s digital imaging radar chip for mining, agriculture, aerospace and construction applications. Google (smart home) and IFM (industrial sensor) are also their customers.

Roadstar.ai

http://roadstar.ai/

Founded in May 2017, Roadstar.ai is a Silicon Valley and Shenzen based startup focusing on Level 4 autonomous driving solutions. The company was founded by three engineers who had previously led autonomous driving technologies at Google, Tesla, Apple, Nvidia, and Baidu USA.

Roadstar.ai focuses on providing fully autonomous robotaxi services and level 2/3 autonomous design solutions for automotive partners. The company also provides technical consultation and design solutions for specific applications and requirements from clients.

Deeproute.ai

https://deeproute.ai/en/

Founded in Februray 2019, Deeproute.ai is focused on a new Level 4 autonomous driving system through which the company plans to provide a technical upgrade to the original Roadstar.ai system and avoid any potential IP issues.

Deeproute.ai has partnered with Dongfeng Motors Corporation Technology Center and co-developed a type of Robo-Taxi and has partnered with Cao Cao Mobility to deploy a couple of hundred robo-taxis during the 2022 Asian Games. The company’s self-driving technology solutions can be used to accelerate the development of self-driving vehicles. Deeproute’s self-driving solution can help automate transportation in container terminals and other confined areas and the company has helped Xiamen Ocean Gate Container Terminal to develop a self-driving container truck to move goods safely and cost-effectively.

The company cooperates with OEMs and Mobility Companies to achieve self-driving commercialisation. Despite being based in China, DeepRoute has achieved a global presence through partnerships with Japan and Australia.

HS Power Drive

http://www.hs-powerdrive.com/

Founded in November 2017, HS Power Drive is involved in the research, production and development of robot joint reducers based on the MRG transmission technology. Robot joint reducers are a key component used to reduce motor RPM and are used by Harmonic Drive for small loading applications and Nabtesco for heavy loading applications.

Other IoT Solutions

China Mobile IoT (CMIoT) Company

http://iot.10086.cn/?l=en-us

Founded in 2012, CMIoT is a wholly-owned subsidiary of China Mobile, aiming to become the supporter of IoT business services, the provider of IoT chips & modules, and the promoter of IoT products and applications. The company provides its applications in the areas of transportation, logistics, power grid, home, security, medical, industry, agriculture, environmental protection, and finance. The company expects to further expand its application areas, having 700 million IoT network users thus far.

The company provides a one-stop solution for IoT services. The support from China’s key telco provider China Mobile has been key in the company’s growth thus far and its expanded product portfolio.

Appendix: Summary on the Shortlisted Emerging Players

Company

Key Product and Technology

Key Strategy

Target End-Market

Years of Operation

Funding

Key Investors

Smart Devices, Homes and Building

Yeelink

Smart lighting which works with smartphones and wearable devices.

Sells through Xiaomi's network.

Smart Home

8

$25,000

HAX Accelerator, China Everbright Group Limited, Investment Arm, and Gold Stone Investment

Horizon Robotics

Brain Processor Unit (BPU), an innovative AI computing architecture building which helps provide comprehensive solutions.
The company’s product, Sunrise, can be used in a variety of scenarios including shopping malls and airports.
Other products are more focused on the automotive industry and autonomous driving. 

Constructing its basic technology platform, which will provide sample models with optimum efficiency.   Expects to avoid competing with players at the bottom of the industry chain.

Autonomous Driving, Retail, Logistics

5

$700.3m

Intel Capital, SK China, and SK Hynix

Broadlink

Uses AI+IoT to provide professional smart home solutions like smart single products, home interconnection, smart real estate, smart hotels, smart homes and smart elderly care.

Targets traditional companies that are struggling to enter the smart world

Smart Home, Smart City

7

$64.8m

CITIC Capital Holdings, Baidu, Liby Group, China Merchants Group, Qualcomm, and Sequoia Capital

 

 

 

Lifesmart

Complete categories of smart devices, integrating advanced IoT technologies and cloud services for both smart home solutions and other industrial solutions.

Online sales and strategic partnerships.

Smart Home

9

$21.4m

Walden International, Daohe Fund, Haier, and Elevation Capital

IoT & Cloud Platforms

Tuya Smart

IoT platform- unique offering of cloud + connectivity + app that simplifies the ‘smart’ process.

Expanding business by increasing the number of products sold through its open platform model.

IoT Developers

6

$200m

NEA, Quadrille Capital, CICC Capital, Oriental Fuhai Capital, Future Fund, China Broadband Capital, and C.M.Capital

Gizwits

IoT development platform and cloud service provider.

Maintaining close ties with manufacturing e-commerce companies which are usually large and would require the company’s solutions.

Manufacturing & E-commerce

10

$ 31.2m

Qualcomm Ventures, Matrix Partners China and Zhejiang Jioren Capital Management

Orvibo

Smart home solutions with strength in IoT, AI and cloud computing technologies

Improving quality control to regain customer confidence.

Smart Home

9

$49.5m

Elevation Capital, Legend Star, Topband, Midea Group, and Red Star Macalline Group

Shanghai MXCHIP Information Technology Co., Ltd.

Hardware products and intelligent solutions for various scenarios.

Gaining recognition as a low cost, reliable and established player for IoT hardware through the development of partnerships with software companies.

Software Companies & IoT Developers

10

N/A

N/A

 

 

 

 

 

 

 

 

 

 

 

 

Ayla Network China

IoT platform offers managed cloud PaaS with flexibility and modularity, allowing quick changes to be made to almost any point of the platform at any time.

Partnering with telecommunication companies to monetise emerging IoT trends.

IoT Developers & Commercial markets

10

$124.4m

Ant Capital Partners, Run Liang Tai Fund, and Sunsea

Manufacturing/Industrial IoT

RootCloud

Cloud services based on IIoT and big data for enterprises in various industries

International Expansion by collaborating with OEMs (targets mostly construction machinery industry as of now)

Construction Machinery, Logistics

4

$76.6million

Hejun Capital, MatrixPartners, and ZWC Partners

Thingple Inc

Development of UHF RFID products and applications designed for high-metal, high-complexity industrial environments.

Targets blue-chip customers via its flagship product, RFID tags.

RFID Application

7

N/A

China Materialia and CM Venture Capital

Automotive and Transportation Systems

Immotor

Develops and sells portable and personal transport systems

Grow through using its technology, products and business model to partner with overseas local players for implementation.

Fleets, delivery service

5

$64.3m

US China Green Fund, Hyundai Motor Company, Yunqi Partners

Uhnder

Digital automotive radar-on-chip which is applied in self-driving, especially for the Automatic Emergency Braking (AEB) and Adoptive Cruise Control (ACC) function.

Focusing on the entire radar manufacturing process which acts as a competitive advantage.

Autonomous driving

6

$45m

Sensata Technologies, Magna, Lockheed Martin

Roadstar.ai

Develops Level 4 autonomous driving solutions

Resolving management and licensing issues to regain investor confidence.

Autonomous driving, robotaxi

3

$140m

Shenzhen Capital Group, Wu Capital and Yunqi Partners

Deeproute.ai

Develops Level 4 autonomous driving solutions

Partnering with external firms to launch robo taxis and promote self-driving technologies.

Autonomous driving, robotaxi

1

$50m

Green Pine Capital Partners and Fosun RZ Capital

HS Power Drive

Development of robot joint reducers based on the MRG transmission technology

Partnering with larger companies to reduce their motor RPM.

Small loading and heavy loading applications

4

$2.9m

Yunqi Partners

Various Other IoT solutions

China Mobile IoT Company

Wholly-owned subsidiary of China Mobile operating as the supporter of IoT business services, providing an IoT platform, hardware such as IoT chips, and modules, acting as a one-stop solution provider for IoT

One-stop solution for IoT needs and strong support from China’s leading Telco Provider have allowed it to target the government and the demand within.

Smart Home, Smart City, manufacturing

9

N/A

China Mobile

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