Roborock produces robot vacuum cleaners and soon also electric cars

Beijing Roborock Technology 北京石头世纪科技 specializes in the development and production of autonomous and cordless vacuum cleaners. The company claims to have produced the highest-selling robot cleaner in China, and in 2021 launched the first dual motor robot vacuum cleaner in Europe.

Last night, Roborock’s founder, Chāng Jìng 昌敬, was interviewed by China’s nationwide state broadcaster CCTV. Chang (40) said that after working at Microsoft, Tencent 腾讯 and Baidu 百度, he started the company with an initial investment of 200,000 yuan ($29,450) in 2014. Listed in Shanghai in 2020, Roborock’s market capitalization is now almost 40 billion yuan ($5.89 billion). It is currently the third-most expensive stock in China, behind only Kweichow Moutai 贵州茅台 and Hoymiles Power 杭州禾迈电力电子.

The context

Xiaomi 小米集团, the Chinese mobile phone company that is often compared to Apple, played a key role in Roborock’s development. In 2016, when Roborock’s revenues were 183 million yuan ($26.94 million), it signed an original equipment manufacturer (OEM) deal with Xiaomi, which gave it access to not only the mobile company’s manufacturing resources, but also its impressive marketing and sales system. A year later, Roborock’s revenues surged to 1.11 billion yuan ($164.77 million), a year-on-year increase of 510.95%. The company now competes directly with Xiaomi in the domestic cleaning robots market.

By 2021, Roborock’s revenues were 5.83 billion yuan ($859.49 million), an increase of 28.84% year-on-year, based in large part on 80% revenue growth in overseas markets. But net profits in 2021 were only 1.40 billion yuan ($206.44 million), a year-on-year growth rate of 2.41%, because the company made huge investments in supply chain management, R&D, and marketing: Last year, Roborock invested 441 million yuan ($64.93 million) in R&D, a year-on-year increase of 67.74%.

But now, Chang is going into a whole new dimension: Electric vehicles.

• In January 2021, he founded a new energy vehicle company in Shanghai, ROX Motors ROX洛轲智能.
• In April, ROX Motors completed about $200 million in Series D financing, after it had previously received $100 million in financing led by Tencent. The company’s valuation has reportedly reached $2 billion.
• The company plans to launch its first vehicle in 2023, an offroad model with a battery life of 1,000 km (621 miles) that the company compares to Mercedes-Benz’s G-class.

The takeaway

Chang Jing’s’s relentless rise — from robotic vacuum cleaners to long range electric vehicles — is emblematic of the new breed of Chinese tech entrepreneurs who are set for a global impact.

However, the rise and fall of a similarly ambitious entrepreneur, Jiǎ Yuètíng 贾跃亭, offers a cautionary tale: Jia tried to turn a streaming video company into a global giant that made everything from phones to electric cars, but he is now bankrupt, being sued by State Grid (China’s electricity utility), and censured by the Hong Kong Stock Exchange, among many other ignominies.