Skip to main content

Xiaomi backs Dyson’s Chinese challenger Dreame in $15 million round

Once known for its affordable smartphones, Xiaomi has in recent years been transforming itself into an online mall for consumer electronics by making deals and building relationships with hundreds of hardware and lifestyle startups. And some of its allies are now going after the Western market with their high-end, China-made products.

Beijing-based Dreame, which produces premium hairdryers and vacuums in the style of Dyson but at lower prices, is one of Xiaomi’s latest bets. The startup announced this week the completion of a Series B+ round led by IDG Capital. The financing of nearly 100 million yuan ($14.6 million) also saw the participation of existing investors Xiaomi and Xiaomi founder Lei Jun’s Shunwei Capital, as well as Peak Valley Capital and Edge Ventures.

Dreame makes Xiaomi-branded vacuums and operates its own label, a common setup between Xiaomi and its suppliers, which get to enjoy the security of Xiaomi distribution and build their names at the same time.

The startup has emerged as a more affordable vacuum brand than the area’s pioneer Dyson, whose inventor James Dyson topped the U.K.’s rich list this year. Dreame’s latest handheld cordless broom V11, for example, costs €350 ($413) whereas Dyson’s new model asks for $600.

“If we compare Dyson to Apple, then there must be a Huawei in the [home cleaning] area, and we believe this company will come from China,” co-founder and vice president of marketing and sales Roc Woo told TechCrunch. Domestic businesses are poised to tap China’s rich manufacturing resources, cheaper labor and longer work hours compared to Western counterparts, he asserted.

“There are more and more success stories of Chinese brands going global, from small players like us through to behemoths like Huawei, Xiaomi, Oppo and Vivo.”

The fresh proceeds will fuel Dreame’s marketing and sales efforts in Europe and North America and allow it to spend more on research and development, which tackles the likes of high-speed motors, fluid mechanics, robot dynamics and visual simultaneous localization and mapping (VSLAM), all essential technologies for Dreame’s family of home cleaners and personal care electronics.

The five-year-old startup likes to talk up its robust engineering background. The founding team consists of friends from Tsinghua University, and chief executive Yu Hao made a dent on campus by launching Skyworks, now the prestigious university’s largest hackerspace with sponsorship from industry giants like Boeing and Megvii. A number of its key staff were involved in China’s national spaceship program Shenzhou.

In addition, the startup boasts spending 12% of its annual sales revenue on R&D and operating a 20,000-sqm factory in eastern China’s Suzhou city, where it works to improve its proprietary designs, a growing trend among Chinese startups as Beijing calls for more tech self-reliance.

Xiaomi codependence

Xiaomi doesn’t put all its eggs in one basket when it comes to picking suppliers. In the realm of home cleaning, it’s also backed robot cleaner Roborock, which raised about 4.4 billion yuan ($640 million) from an initial public listing on China’s new tech board in February. Xiaomi first bankrolled Roborock back in 2014, four years before its first investment in Dreame.

Woo believed Dreame and Roborock can co-exist, for his company targets a wider product spectrum while Roborock is more focused and akin to iRobot. The startup doesn’t consider Tyson, of which Woo spoke highly, a direct competitor either, for it’s venturing beyond cleaning into areas like smart mobility.

When asked whether Xiaomi picks winners, Woo said “Xiaomi is more of a platform and doesn’t allocate resources.” While it tended to work closely with startups in its early years, Xiaomi’s empire of consumer products runs on the basis of market competition these days.

“Our collaboration with Xiaomi is no different from the way we work with Amazon or eBay. The investment means not much more than having a capital tie-up and a foundation for trust,” he said. Being in the Xiaomi family does provide a practical perk: it’s a guarantee for sales and offers a bargaining chip for Dreame in its negotiation with production partners.

What Xiaomi gets in return is millions of global consumers signed onto its Mi Home app, a central platform for managing Xiaomi-branded Internet of Things. In Europe, its biggest market, Dreame said it strictly follows the GDPR’s rules on data protection.

Boosted with new capital, Dreame is ready to foray into the U.S. by the end of this year. It already derives 70-80% of its sales outside of China, with a concentration in Europe where it saw a spike in orders since the COVID-19 outbreak for its products were sold mainly online.

For the current year, it aims to generate 3 billion yuan ($440 million) in sales, which doesn’t seem far off given it had shopped over 1 million vacuums by May since the category’s debut two years ago.



Source: TechCrunch

Popular posts from this blog

The hidden cost of food delivery

Noah Lichtenstein Contributor Share on Twitter Noah Lichtenstein is the founder and managing partner of Crossover , a diversified private technology fund backed by institutional investors, technology execs and professional athletes and entertainers. More posts by this contributor What Studying Students Teaches Us About Great Apps I’ll admit it: When it comes to food, I’m lazy. There are dozens of great dining options within a few blocks of my home, yet I still end up ordering food through delivery apps four or five times per week. With the growing coronavirus pandemic closing restaurants and consumers self-isolating, it is likely we will see a spike in food delivery much like the 20% jump China reported during the peak of its crisis. With the food delivery sector rocketing toward a projected $365 billion by the end of the decade, I’m clearly not the only one turning to delivery apps even before the pandemic hit. Thanks to technology (and VC funding) we can get a ri

Cyber Monday Canada: Last-minute deals for everyone on your list

Best Cyber Monday Canada deals: Smart Home Audio Phones, Tablets & Accessories Wearables Laptops & PC Components Amazon products Gaming Televisions Cameras Lifestyle & Kitchen Toys & Kids Cyber Monday Canada is here, and retailers are rolling out the red carpet for customers who want to shop for everything from tech to kitchenware to games and everything in between. Unlike years past, Cyber Monday Canada deals look a bit different than normal. Instead of retailers trying to pack their stores with as many shoppers as possible, we're seeing tons of online deals that you can take advantage of from the comfort of your home. We've rounded up our favorites below, so feel free to browse through the best of what Canada Cyber Monday has to offer! This list is being updated with new Cyber Monday deals all the time, so check back often. Spotlight deals It's a Switch Nintendo Switch Fortnite Edition bundle $399.95 at Amazon It's a Switch.

Slack’s new integration deal with AWS could also be about tweaking Microsoft

Slack and Amazon announced a big integration late yesterday afternoon. As part of the deal, Slack will use Amazon Chime for its call feature, while reiterating its commitment to use AWS as its preferred cloud provider to run its infrastructure. At the same time, AWS has agreed to use Slack for internal communications. Make no mistake, this is a big deal as the SaaS communications tool increases its ties with AWS, but this agreement could also be about slighting Microsoft and its rival Teams product by making a deal with a cloud rival. In the past Slack CEO Stewart Butterfield has had choice words for Microsoft saying the Redmond technology giant sees his company as an “existential threat.” Whether that’s true or not — Teams is but one piece of a huge technology company — it’s impossible not to look at the deal in this context. Aligning more deeply with AWS sends a message to Microsoft, whose Azure infrastructure services compete with AWS. Butterfield didn’t say that of course

iPhone 13 Pro vs. iPhone 15 Pro Buyer's Guide: 50+ Differences Compared

The iPhone 15 Pro brings over 50 new features and improvements to Apple's high-end smartphones compared to the iPhone 13 Pro, which was released two years prior. This buyer's guide breaks down every major difference you should be aware of between the two generations and helps you to decide whether it's worth upgrading. The ‌iPhone 13‌ Pro debuted in 2021, introducing a brighter display with ProMotion technology for refresh rates up to 120Hz, the A15 Bionic chip, a telephoto camera with 3x optical zoom, Macro photography and photographic styles, Cinematic mode for recording videos with shallow depth of field, ProRes video recording, a 1TB storage option, and five hours of additional battery life. The ‌iPhone 13‌ Pro was discontinued upon the announcement of the iPhone 14 Pro in 2022, but it is still possible to get hold of it second-hand. Our guide helps to answer the question of how to decide which of these two iPhone models is best for you and serves as a way to c