China’s IoT industry leader Lumi United Technology (绿米联创), announced the completion of Series B financing round, on November 14, raising a total of USD 100 million. Yuanyi Investment (远翼投资), Kaihui Fund (凯辉基金), Yuyue Capital (愉悦资本), and Yunyi Capital (云沐资本) led the investment.
The company’s founder, Yu Yanxi said that this round of financing would be used to further promote research and development for more innovative products, such as enhancing Xiaomi smart home ecological chain and improve Aqara’s branding through the strengthening of its ‘online and offline’ retail channels.
Founded in 2009, Lumi is a technology company that is dedicated to building smart devices. Its hardware and software system combines the most advanced AI technology and big data together to create a smart life service platform. With an injection of CNY 40 million (USD 5.7 million) by technology giant Xiaomi in 2014, Lumi started to develop the Xiaomi Smart Home Suite, focusing on low-power innovative smart home system.
In 2016, Lumi launched its own brand Aqara with the concept of ‘full house intelligence.’ After rapid expansion, Aqara currently has more than 300 home experience outlets and over 400 service providers covering most cities in China. Aqara is seeking to grow in overseas market. In recent years, Lumi has signed a strategic agreement with international technology giants such as LG and SEG and joint other smart home platforms such as Apple HomeKit, Amazon Alexa, and Google Assistant ecosystem.
The smart home market in China is highly competitive, and the market share per vendor is unclear. Major players are actively seeking opportunities to lay the foundation of the future market. At the moment, Internet giant Baidu, Alibaba, Tencent (BAT) are leading China’s smart home market. Lenovo, Jingdong, Xiaomi and Meizu closely follow behind, while home appliance manufacturers such as Haier, Midea, Gree and Hisense are entering the market.
According to Prospective Industry Research Institute, China’s smart home market reached USD 6.53 billion in 2018, ranking second in the world, just behind the United States, with USD 18.9 billion. 150 million units were shipped in 2018, with a year-on-year increase of 36.7%. It is predicted that China’s smart home industry will continue to grow rapidly in the next 4 years, reaching 500 million units in 2023.
However, China’s smart home has a low penetration rate, with only 4.9%, compared US that attained 32% in the same period. The low penetration rate, to some extent indicates the high potential growth rate and emphasizes broad market space.
From a global perspective, the market size of smart homes in 2017 was USD 43 billion and is estimated to more than triple its size by 2023 to USD 141 billion, with Compounded Annual Growth Rate (CAGR) of 21.7%. Current home penetration amounts to 7.2% and is expected to reach 16.7% by 2023. With this, there is still great potential for Lumi to expand, both domestically or globally.