Home appliance maker Joyoung buys controlling stake in robot mop maker ZBeetle

Market observers interpreted the equity sale as Joyoung's gambit to diversify into cleaning robotics, a niche product category that has grown into a multi-billion-dollar market in recent years.

Joyoung (九阳股份), a home appliance titan in China, announced December 16 that one of its subsidiaries purchased a 68.45% stake in Shenzhen-based cleaning robot maker ZBeetle (甲壳虫智能) for 126.3 million yuan (US$17.72 million).

Following the transaction, the Shandong-headquartered Joyoung will become a majority shareholder of ZBeetle, Joyoung said in a stock exchange filing dated December 16.

Founded in January 2021, ZBeetle is committed to making robot vacuum, mop and scrubber for home use.

The company, however, quickly succumbed to intense competition with legacy players like Ecovacs (科沃斯), Roborock (石头科技), Dreametech (追觅科技), Xiaomi (小米集团) and Narwal (云鲸科技).

According to the exchange filing by its new parent Joyoung, ZBeetle reaped 44.35 million yuan and 26.84 million yuan in 2022 and the first quarter of 2023.

It posted a net loss of 77.17 million yuan and 5.16 million yuan during the same period.

An attempt at diversification

Market observers interpreted the equity sale as Joyoung’s gambit to diversify into cleaning robotics, a niche product category that has grown into a multi-billion-dollar market in recent years.

Cleaning and sweeping robotics rode the waves of new consumer demands in recent years, thanks partly to the post-pandemic rise of “touchless economy” and a “hands-free” approach to household chores like vacuuming and mopping.

Commenting on the necessity of the latest deal, Joyoung said both the demand for and supply of sweeping robot are growing rapidly, signaling immense market opportunities.

Although ZBeetle is still an incipient startup, it possesses core patents in the field of sweeping robotics and boasts strengths in R&D, smart manufacturing and operation.

These merits align well with Joyoung’s digital supply chain and omnichannel marketing, and are essential to the quality development of the company’s cleaning product business, Joyoung said.

After Joyoung acquired the controlling stake, Zheng Quan, founder of ZBeetle, will remain in his role as CEO with a reduced stake at 20.67%, down from 34.04%.

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Ni Tao

Ni Tao is the founder and editor-in-chief of cnrobopedia. Prior to cnrobopedia, he had a full decade of experience with a major state-run English-language newspaper as a tech reporter and opinion writer. He is also a communications specialist, having provided consultancy services to established firms like Siemens, Philips, ABinBev, Diageo, Trip.com Group (Nasdaq: TCOM, HK: 9961), Jianpu Technology (NYSE: JT) and a handful of domestic startups. A graduate of Fudan University, he writes widely about China's business and tech scenes and other topics for global publications including South China Morning Post, SupChina, The Diplomat, CGTN, Banking Technology, among others, and tries to impart his experience to students at Fudan University Journalism School, where he is a part-time lecturer. When he's not writing about robotics, you can expect him to be on his beloved Yanagisawa saxophones, trying to play some jazz riffs, often in vain and occasionally against the protests of an angry neighbor. Get in touch with him by dropping a line at nitao0927@gmail.com.

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