When the service robot in the Marriott elevator initiates a conversation with its youthful voice, few would think that its creator, Cloudwalk Technology, has recently rung the bell for its IPO led by founder Zhi Tao.
This bell ringing is not just a milestone for one company—this year, Yushu Technology has announced its plans for a year-end IPO, and Zhiyuan Robotics is heading to Hong Kong. In September alone, five robot companies, including Youai Zhihuo, submitted their applications, with over 15 companies in the supply chain aiming for the Hong Kong stock market. For leaders of hard-tech companies, this wave of ‘robot IPO fever’ is not distant industry news, but a mirror reflecting their own challenges: how to transition from ‘burning cash on R&D’ to ‘capital recognition’? How to carve out irreplaceable competitive advantages in niche markets?
As a financial consultant with ten years of experience connecting companies with capital, today I will break down a reusable ‘breakthrough formula’ using the case of Cloudwalk Technology.
1. Cloudwalk’s 11-Year Journey: The ‘Three Survival Rules’ for Hard-Tech Companies Zhi Tao’s entrepreneurial path is a microcosm of countless hard-tech companies—from being rejected while trying to bring robots into hotel doors to now covering 34,000 hotels and providing over 500 million services annually, culminating in its entry into the capital market. Behind this journey lie three key decisions worth noting for all business owners. 1. Choosing the Right Track: Focusing on ‘High Certainty’ Scenarios is More Important than Chasing Trends When Cloudwalk was founded in 2014, the service robot sector was still vague, but Zhi Tao’s team did not aim too high; instead, they locked onto the ‘hotel scenario’: first, the high labor costs in hotels (over a million yuan per store annually) and the strong demand for standardized services created a real pain point; second, hotels have stable payment capabilities, and once a single scenario is proven, it can be quickly replicated. This choice directly determined Cloudwalk’s ‘survival line’: when the pandemic hit in 2020, the demand for ‘contactless services’ surged, and Cloudwalk’s order volume doubled, partnering with over 1,300 hotels that year—while some companies that aimed for ‘all scenarios’ became stagnant due to scattered focus. Insights for Business Owners: Choosing a track is not about ‘seeing which is hot,’ but about finding ‘scenarios with clear pain points, strong willingness to pay, and replicability.’ For example, agricultural robots targeting ‘pest control needs in large-scale planting’ and medical robots focusing on ‘hospital logistics’ follow the same logic. 2. Developing a Model: From ‘One-Time Sales’ to ‘Continuous Revenue,’ Gross Margin is Key Initially, Cloudwalk made money by selling its ‘Run’ series of robots, with a gross margin of only 24.3% in 2022; however, it later shifted to a ‘hardware + AI system subscription’ model—selling robots while using a scheduling system to help hotels manage multiple devices and analyze service data. The proportion of subscription revenue increased year by year, with gross margin soaring to 43.5% by 2024. This is precisely the ‘business model upgrade’ that capital values most: one-time hardware sales can only earn short-term profits, while continuous services can provide stable cash flow and double the company’s valuation. Just like Geekplus, which does ‘robot leasing (RaaS),’ where the sustainability of income far exceeds pure hardware sales. 3. Controlling Capital: Leverage without Losing Power, Founders Must Retain ‘Decision-Making Authority’ Cloudwalk’s financing path is typical: early on, it secured angel funding from iFlytek (leveraging technical endorsement), mid-stage funding from Tencent and Ctrip (leveraging scenario resources), and later funding from Qiming Venture Partners and Alibaba (leveraging pre-IPO capital reserves), while always maintaining ‘founder-led’ control—Zhi Tao directly holds 9.73% of shares and controls 36.52% of voting rights through voting arrangements, higher than any single investor. Many business owners make the mistake of ‘taking money without thinking,’ ultimately diluting their voice in capital. Cloudwalk’s approach is to select ‘investors who can bring resources’ (for example, Ctrip helped connect it with hotel channels) and to lock in decision-making authority through equity structure design (such as AB shares and concerted action agreements) in advance. 2. Why Are Robot Companies Now Crowding the IPO Market? Understanding the Underlying Logic to Find Your Opportunity The recent surge in robot company IPOs is not coincidental but a result of the resonance between ‘industry stage + capital rules + market demand.’ This underlying logic applies to all hard-tech companies. 1. Go Public First, Then Profit: Policies Provide a ‘Window Period’ In the past, hard-tech companies had to be profitable to go public; however, the new rules of the Sci-Tech Innovation Board (‘1+6’ rule) and Hong Kong’s Chapter 18C now allow companies that are ‘not profitable but have high R&D investment and technical barriers’ to list. For instance, Cloudwalk is projected to lose 185 million yuan in 2024, but because it has ‘annual revenue exceeding 200 million yuan and R&D investment accounting for over 30%,’ it still meets the listing criteria. For business owners, this means ‘no need to wait for profitability to plan for an IPO’—as long as the core technology is solid and there is a clear commercialization path, they can obtain R&D funding through an IPO in advance, avoiding elimination during the ‘cash-burning phase.’ 2. Without Going Public, Survival is Difficult: The Industry is Entering a ‘Capital Race’ The robot industry is a ‘heavy R&D, heavy implementation’ sector, with Yushu Technology and Zhiyuan Robotics each investing over 100 million yuan annually in R&D. An IPO is the most direct ‘blood transfusion channel’: Geekplus raised 1.5 billion yuan after going public to expand production capacity; Cloudwalk plans to invest 30% of its IPO proceeds into AI model development. The industry has already seen ‘involution’: within the same scenario, companies backed by capital can lower prices faster to seize orders and expand into new markets. For business owners, ‘whether to go public’ is no longer a choice but a necessary question of ‘whether they can stay at the table.’ 3. Going Public is Not the End: Capital Looks for ‘Long-Term Value’ Although many robot companies are going public, capital is not naive—Geekplus and Boleton saw their stock prices rise over 40% after listing, primarily because they have ‘clear commercialization paths’; while some companies saw their stocks drop post-IPO due to ‘having only technology without practical scenarios.’ This serves as a reminder for business owners: an IPO is merely a ‘temporary victory’; the real test is whether they can ‘consistently deliver performance’ after going public—for example, Cloudwalk plans to expand from hotel scenarios to hospitals and factories, essentially lowering costs and increasing revenue scale through ‘multi-scenario technology reuse.’ 3. Four Practical Suggestions for Business Owners: What Can We Learn from the ‘Robot IPO Wave’? Whether you are in robotics, smart manufacturing, or other hard-tech fields, you can learn four core actions from this wave of IPOs: 1. Find ‘Small but Beautiful’ Scenarios and Aim to be a ‘Single Champion’ Do not aim too high; like Cloudwalk focusing on hotels and XAG deepening agriculture, choose ‘niche scenarios that you can excel in and others find hard to replace.’ For instance, in industrial robotics, focusing first on ‘assembly processes in the 3C industry’ is easier than trying to create ‘universal robots for all industries.’ 2. Design a ‘Sustainable Business Model’ Early to Show Capital the ‘Long-Term Profitability’ Do not rely solely on product sales for profit; layout a ‘product + service’ model early: for example, while selling equipment, also provide maintenance and data analysis services; or adopt a ‘leasing + per-use fee’ model (like charging for logistics robots per delivery order), which can increase gross margins by 10%-20% and is more appealing to capital. 3. Choose the Right Partners for Financing, Avoid Becoming a ‘Puppet of Capital’ Before each round of financing, consider: ‘What resources can this investor provide me?’ (for example, industrial capital provides channels, financial capital offers IPO guidance); at the same time, lock in decision-making authority through ‘equity structure design’ (such as establishing employee stock ownership plans and concerted action agreements) to avoid ‘losing control of the company after receiving funds.’ 4. Leverage Policy ‘Window Periods’ to Prioritize Going Public If your company meets the criteria of ‘high R&D investment, core patents, and early commercialization,’ focus on the Sci-Tech Innovation Board and Hong Kong’s Chapter 18C: for instance, the Sci-Tech Innovation Board has a minimum market value requirement of only 1 billion yuan for ‘hard-tech companies,’ and Hong Kong’s Chapter 18C allows ‘unprofitable biotech and advanced manufacturing companies’ to go public. Planning 3-5 years in advance can help avoid detours. In conclusion: Going public is a ‘coming-of-age ceremony,’ not a ‘final destination’ The bell ringing for Cloudwalk Technology essentially signals a successful closure of the ‘technology + scenarios + capital’ loop. For business owners, this wave of robot IPOs is not just ‘other people’s excitement’ but a ‘practical teaching’—it tells us that the success of hard-tech companies does not rely on ‘showing off technology’ but on ‘implementing technology in real scenarios and then accelerating advantages through capital.’ Just as Zhi Tao said at the listing ceremony: ‘Robots will eventually enter thousands of households, but before that, we must first perfect the services in every niche scenario.’ For all business owners, the same principle applies: an IPO may help you ‘stand on a higher stage,’ but what will help you ‘stand firm’ is always ‘the ability to solve user pain points.’ Will the next company to ring the bell be yours?
Tip: If your company is planning financing or going public, feel free to reach out for a discussion. Insight Consulting’s financial advisors will provide you with customized capital path diagnostics.