Meituan-backed Chinese unmanned logistics vehicles developer Zelos Technology has raised another $100 million, less than nine months after the completion of a Meituan-led $100-million Series A round, defying a challenging fundraising environment.
CDH Investments’ tech investment platform Bai Fu Wealth Management and Chinese dual-currency venture capital (VC) firm Blue Lake Capital jointly led the transaction. Existing shareholders also participated in the deal, according to a Monday release by investment bank Lighthouse Capital, the exclusive financial adviser.
In February, Zelos closed its Meituan-led Series A round at $100 million with participation from Baidu Ventures, as well as China-focused VCs Xianting Fund and Seekdource. Existing shareholders like Blue Lake Capital and Xiamen C&D Emerging Industry Equity Investment re-upped.
Zelos managed to secure two $100-million transactions in a year as private-market investors continue to tread new investments with caution amid China’s slow economic recovery and ongoing geopolitical risks.
The dealmaking activity in startups headquartered in Greater China has been on a downward trajectory since mid-2023. Q3’s deal volume dropped further by 5.9% to 493 deals. The quarter’s overall funding value grew 40.2% to $12.69 billion, indicating a flight of capital to the top fundraisers, according to DealStreetAsia’s latest report Greater China Deal Review: Q3 2024.
Zelos, founded in 2021 and headquartered in eastern China’s Suzhou City, secured the new funding as one of the few Chinese developers of level 4 autonomous driving vehicles used for urban logistics to have achieved a positive gross profit margin – which essentially means that the firm has at least turned a profit from its core business activities after covering production costs.
With R&D centres in China and the US, Zelos develops full-stack L4 autonomous driving technologies, including L4 self-driving algorithms and core software and hardware modules. These technologies power its unmanned urban logistics vehicles, for which Zelos is also involved in vehicle R&D, delivery, sales, and after-sales maintenance.
“Intelligent driving is ushering in a critical window of mass production and commercialisation,” Blue Lake Capital was quoted as saying in the release. “We decided to double down on Zelos to showcase our faith and support in the team. We believe they will continue to do well because of their strong product development capability, which has significantly enhanced the industry efficiency and created true value for society.”
After the introduction of its debut series of mass-produced unmanned urban logistics vehicles in the fourth quarter of 2023, Zelos launched four new L4 vehicle models in June, with varied cargo capacities to satisfy different industry needs.
Among the four new models include its flagship Z5 model, which is equipped with multi-compartments and cold chain logistics functions to mainly provide business-to-business (B2B) deliveries of parcels, fresh produce, and pharmaceuticals. There is also the highly-flexible Z2 model for navigating crowded streets and busy warehouses, factories, and underground garages; the high-milage, heavy-load Z8 model for industrial logistics; and the Z10 model, with the largest cargo capacity to specialise in pallet loading and unloading.
The new funding comes as the Chinese startup is actively carrying forward its global forays. Having secured orders from Malaysia, Japan, and the Middle East, Zelos, through a partnership with Singapore’s supermarket chain FairPrice Group, received the first M1 permit from the Land Transport Authority (LTA) in May to operate fully driverless autonomous vehicles on public roads in Singapore for cargo transportation.
In February, Zelos closed its Series A round at $100 million. Chinese food delivery giant Meituan led the deal, with participation from Baidu Ventures, as well as China-focused VCs Xianting Fund and Seekdource. Existing shareholders like Blue Lake Capital and Xiamen C&D Emerging Industry Equity Investment re-upped.
