China

This Chinese city is now the Silicon Valley of robotics startups

Venture capitalists are rushing into Dongguan, once "factory to the world."

Two people with robot

New and established companies are flocking to Songshan Lake.

Photo: Bloomberg/Getty Images

The southern Chinese city of Dongguan was once known as the world's factory. Now, driven by both a local and national desire to upgrade Chinese manufacturing, it's quickly emerging as a powerhouse for the country's robotics ambitions.

In the past five years, Songshan Lake, an industrial development zone south of Dongguan, has attracted hundreds of robotics companies, both new and established. The products they produce range from industrial robots used in assembly lines to service robots for everyday homekeeping. While the pandemic slowed down the growth for most industries last year, robotics has had a good run as the need for contactless services and automation work rose. A slew of dazzling venture capital deals have come out of robotics startups in Dongguan, led by top investors like Sequoia, Hillhouse and ByteDance.

It's no coincidence that both Dongguan and Guangdong, the province in which it sits, have become trailblazers in robotics. Since the last century, the southern province has become a manufacturing hub benefiting from the international business flowing through its neighboring city of Hong Kong. There are thousands of factories, big and small, producing everything from electronics to toys to clothing to furniture. The province has also birthed some of China's most prominent brands, including Huawei.

But its heavy reliance on manufacturing also means it will be hit the most when China eventually loses its edge in low-end manufacturing, which looks inevitable as population growth slows and labor cost rises. As a result, it has become one of the first provinces to decide automation is the way forward. For Dongguan, the third-largest city in Guangdong and one with a weaker service industry, that means robots.

In the past few years, Dongguan has frequently made headlines for its factories that are now "unmanned." In January 2019, the mayor announced the city had replaced 280,000 workers in manufacturing by installing 91,000 robots, the South China Morning Post reported. But in earlier days, Dongguan's robots were mostly imported from foreign suppliers, as Chinese companies didn't have the technology to build their own. That is, until a recent surge of robotics startups aimed to change just that.

In 2014, a government-supported robotics startup incubator Xbot Park was founded in Songshan Lake. By attracting Chinese entrepreneurs through seed funding, it would turn into a vibrant community of nearly a hundred robotics startup teams today, some of which have grown into unicorns.

Last year, Dongguan cleaning robots maker Narwal, the first team to come to the startup incubator in 2015, closed two rounds of fundraising within two months. Investors include Sequoia, Source Code Capital, Hillhouse and ByteDance.

In July, Dongguan-based AgileX, a 5-year-old startup that manufactures robot chassis, raised over $15 million in a series A from top venture capitalists like Sequoia Capital, 5Y Capital and Vertex Ventures, a subsidiary of Singapore sovereign wealth fund Temasek.

There is so much interest in this sector to the extent that Dongguan's "robotics startups are out of stock," says an article in China Venture, an online publication focusing on investment news. "Dongguan's manufacturing industry is very developed," a spokesperson for AgileX told Protocol. "There's a strong and comprehensive supply chain of smart hardware, which is beneficial to the designing and manufacturing of robots."

Not only do the thousands of factories in Dongguan make it cheap and fast to manufacture robots, but they also give industrial robot startups abundant opportunities to test and iterate their products.

"There's a lot of significant research that suggests that newer technologies are easier to develop at quality and more rapidly when you're embedded in a local geography that has demand for that technology," Matt Beane, an assistant professor specializing in robotics at the University of California, Santa Barbara, told Protocol. "The more you can rapidly iterate with the user of your technology and to get data on the usage of your technology, the more opportunity you have to make it more effective, or to let it go if it's not effective."

"People here [at Dongguan] can develop a new tech product five to 10 times faster than in Silicon Valley or Europe, at one-fifth or one-fourth the cost," Li Zexiang, a Hong Kong University of Science and Technology professor who's also the founder of Dongguan's robotics startup incubator Xbot Park, told Guangdong's official paper Nanfang Daily in 2019.

The efforts have paid off. Today, Guangdong has the most robotics companies and robotics industrial parks among all Chinese provinces, according to market research company Forward Intelligence. And the scaling effect has drawn more startups and investors, as automation and smart hardware have become a focus of Chinese industrial policy.

Here comes COVID-19

Unlike retail and tourism, robotics has come out of the pandemic practically unscathed.

Earlier in the pandemic, companies specializing in industrial robots were hit as factories were forced to close due to the COVID-19 spread. Elephant Robotics, a company also based in the Guangdong province, had to cut staff by a fifth, Reuters reported in June 2020.

But as factories reopened and manufacturing capacities rebounded, the need for industrial robots returned. According to the Germany-based nonprofit International Federation of Robotics, China is leading the world in the robotics industry's recovery, with a 19% boost in robotics sales in 2020 compared to the year before. There's even an increased interest in robotics as the uncertainty of human infection becomes another reason to replace human labor with automation. Billions of dollars of venture capital money have poured into robotics startups in 2021 alone.

Contactless service robots and disinfection robots are particularly popular, as they provide essential services while reducing risks for service workers most likely to be exposed to the virus. Across the country, disinfection robots and temperature-taking robots are being mass deployed as part of China's plan to showcase its high-tech pandemic control methods.

AgileX, the Dongguan-based company that produces the chassis for these robots, is one beneficiary. "During the pandemic, the company's annual sales have increased 200%. Total number of shipments in the first half of this year has also surpassed that of the entire 2020," the company told Protocol.

Fintech

Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
FTA
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.
Enterprise

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.

Enterprise

Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories
Bulletins