On January 13, 2019, Youdian Tech secured Alibaba’s USD 104 million investment in its series B financing and Alibaba is the only investor in this financing round. The smart lock market has never been so popular.
On January 13, 2019, Youdian Tech (优点科技, Youdian) secured Alibaba’s USD 104 million investment in its series B financing and Alibaba is the only investor in this financing round. According to iyiou.com’s report, Youdian has received half of the fund from Alibaba.
Youdian is an IoT (Internet of Things) platform focusing on smart lock and other security areas. Founded in 2017, Youdian is based in Shenzhen and has several offices nationwide. Less than two years of development, Youdian has received four rounds of financing.
Comparing to another smart locker and IoT company Yunding Technology (云丁科技, Yunding), Youdian shares some similar features with Yunding. Both are smart-lock-based IoT companies providing security IoT hardware and integral IoT services. However, Yunding was founded three years earlier than Youdian and now Yunding has entered a mid-post state in financing – it raised USD 87 million in series D in December 2018. Calculating from the total funding amount, Yunding has raised USD 156 million while Youdian has secured USD 127 million. Though the gap of USD 28 million is not a small amount, when taking the founding time of each into consideration, Youdian is a promising newborn.
Nearly USD 300 million rushed into these two young smart lock providers - smart lock might not just a lock as the mass think as it will be. Without talking about the investors’ background of the two companies, smart lock itself is a critical ring among the home IoT ecosystem. The smart lock as mentioned in this article is not just a lock using fancy unlock methods like fingerprints or PIN, but a critical element in the IoT environment. Unlike the smart speaker such as Echo, Google Home, and HomePod, which are discretionary goods, lock is a must-have for all families in general speaking. Hence, the incentive for a smart lock should be stronger than a smart speaker for setting an IoT environment, especially when the smart home aiming to provide more secure protection and more enhanced convenience.
Based on an Analysis’ report, the penetration rates of smart lock in Europe & America, Japan & South Korean, and China were 50%, 80% and 3% respectively in 2017. The low penetration rate in China indicates the room of future potential growth and the low penetration of IoT environment. Using a smart lock to unlock the IoT home environment seems to be the shortcut for IoT platform providers. Youdian’s series B investor Alibaba is distributing its IoT network, and its ambition towards IoT can be keeked from Tmall Genie (天猫精灵), the smart speaker series first debuted in 2017. As being Youdian’s competitor, Yunding is financially supported by some smart-home-background investors, Shunwei Capital (顺为资本) and Xiaomi Tech (小米科技, Xiaomi).
Shunwei Capital is a VC founded by the CEO of Xiaomi, LEI Jun (雷军) and other investors. Thus, Shunwei Capital and Xiaomi can be regarded as one family, the Xiaomi family. Xiaomi family has the strongest motive to invest in smart lock, as Xiaomi has already become the most famous IoT solution and platform provider in China – Xiaomi own-branded IoT physical elements including rice cooker, air filter, and other home electronics and IoT modules that could be applied onto other brands’ electronics and allow them to be connected to other IoT subjects with Xiaomi’s ecosystem.
In China, there are several tech giants’ background investors, like Baidu, Alibaba, Tencent, Xiaomi etc. These investors’ interests are somehow similar and hence so are the startup types they invested in. Present active China-based smart speaker producers are Tmall (Alibaba), Xiaomi, Dingdong (JD.com) and others. Smart speakers have become the well-known IoT connecter and a CPU-like role in a smart home setting. Despise the entertainment function and manipulation of home-use electronics, IoT’s application in security function will be the next appealing point for customers. Smart lock, as the frontier of all other security elements, is carrying the duty to transform current smart home security solutions. With already-existed smart lock players, Alibaba's participation in the smart lock field will turn the IoT industry into a more diverse climate and a more expecting future not only for smart home and IoT players but also for every real family.