While countless startups strive to make a dent in spacious local education market, the state also bets big on some of them. Educational robotics startup Evolver (小胖机器人) has received CNY 500 million (USD 70.8 million) from the government of Qingdao’s Jimo district (即墨区). The deal gave the firm a post-money valuation of CNY 2 billion (USD 283.1 million).
The money raised will be used to expand the product mix as well as to upgrade the core technology. This is the third funding event for the company. It previously raised hundreds of millions of yuan from ‘Internet+’ private equity fund Tsing Ventures (水木资本) and investment firm SEEKDOURSE (索道投资), which has several other ‘Artificial Intelligence’ (AI) and robotics enterprises in its current portfolio.
Founded in 2015, Evolver has been aggressively penetrating provincial markets by signing contracts with local kindergartens and primary schools. More than 2,000 such agreements have been concluded in the past four years. What’s more, the manufacturer is planning to crack some of the foreign markets. It is estimated that the combined annual overseas sales volume will reach CNY 300 million (USD 42.33 million) in two years.
According to Chinese news portal PEdaily, the company is likely to file for an IPO on the Shanghai Stock Exchange Star Market before 2021. And it is not alone: robotics companies are set to swoop en masse into the venue. For instance, Xiao-i (小i机器人), one of the most serious of Evolver’s competitors, which has carried out several funding events – obtaining heaps of money from investment giants like Alibaba, IDG Capital and Intel Capital – is highly positive about the new marketplace.
“The Star board creates great convenience for Chinese tech enterprises, now they can choose the right place and the right time to list the stocks.”
Yuan Hui, CEO of Xiao-i
A venture capital influx between 2015 and 2017, along with a high demand for education services, stirred stiff competition on China’s edutech scene. Multiple robotics companies have made attempts to steal into the new market segment, developing R2-D2-like smart assistants. According to investment information database ITjuzi, over 530 startups were operating in the sector as of September 17, 2019.
"In the future, human teachers will be mainly in charge of emotional communication and personality shaping," said Wei Ran, CEO of Evolver. "At the same time, robot-assisted teaching will be broadly used to accelerate the learning process."