Five Chinese startups that weathered a tough year with Covid

Five Chinese startups that weathered a tough year with Covid lockdowns

A robot made by Kennon Robotics delivers food at a Haidilao hotpot restaurant in Shanghai, April 7, 2021.

Qilai Shen | Bloomberg | Getty Images

BEIJING — In a year of Covid lockdowns and travel restrictions, some Chinese startups that survived found growth online and abroad.

China’s economy is likely to have grown by just 3% in 2022, economists estimate. Lockdowns stifled business and discouraged investors from scrutinizing deals. The path to an IPO in the United States — a key route to generating investment returns — is essentially frozen.

According to an assessment by Preqin, a VC data service, the next year or two will remain weak in terms of venture capital support for startups in China and elsewhere. According to data from Preqin as of Dec. 28, US$ raised by China-focused VCs plunged more than 80% from 2021 to nearly US$9 billion in 2022.

But many deals have yet to be finalized in China’s information technology industry, factory-related sectors and business connectivity apps, among others, said Angela Lai, senior research analyst at Preqin.

She said venture capitalists have almost record-breaking capital on hand — what’s known as “dry powder.” China-facing VCs were worth $104.7 billion as of March 2022, data from Preqin showed.

“Money managers are ready to react when the market picks up,” Lai said. “Everyone’s waiting to see when that’s a really good entry point, when the macro picks up steam.”

As China prepares for a zero-Covid reopening, here are a selection of five startups they say they’ve made in 2022, in alphabetical order:

Anxinsec technology

Year of foundation: 2019

Notable backers: Hillhouse Capital, BlueRun Ventures

Headquarters: Beijing

Cybersecurity company Anxinsec quadrupled its revenue to tens of millions of yuan in 2022, said founder Alex Jiang. That’s thanks to its big enterprise customers, which he said are now Siemens,, and Baidu.

The three companies did not immediately respond to a request for comment.

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The startup avoided major impacts from China’s Covid lockdowns by being able to deliver its products virtually, Jiang said. He added that the increased use of digital tools — from ride-hailing apps to video conferencing — means organizations’ core assets are becoming more digital, leading to greater demand for cybersecurity protection.

Anxinsec focuses on data or storage protection services for enterprises, Jiang said. He pointed out that Microsoft has said that 70% of vulnerabilities are related to memory.

The startup already has subsidiaries in Hong Kong and the United Arab Emirates, but the company still has a long way to go before going public, Jiang said.


Year of foundation: 2016

Notable Backers: Skyline Ventures

Headquarters: Foshan

In a year of inflation and war, Europe-focused kitchenware brand Ciarra saw sales grow about 25%, said founder Kang Zuotian.

He claimed that if war hadn’t broken out in Ukraine, sales could have risen by about 60%, but European consumers’ willingness to spend slowed as energy prices rose more than incomes.

The company sells range hoods and induction cooktops for home use at list prices of a few hundred euros each — or a few hundred dollars for the US market.

Although Ciarra products could be 30% to 40% more expensive than comparable products on the market, they use half the electricity, Kang said in Mandarin, translated by CNBC. “We don’t want Chinese companies going abroad just to be cheap.”

Most products reach Europe by ship and are mainly sold through physical stores, he said. Kang said he plans to use 2022’s financial performance to prepare for an IPO in mainland China in the near future.

Keenon Robotics

Year of foundation: 2010

Notable Backers: SoftBank, Prosperity7 Ventures, Yunqi Partners

Headquarters: Shanghai

Keenon Robotics failed to see significant growth in China in 2022, and its sales increased more than 40% thanks to its overseas business, COO Wan Bin said.

The company aggressively pushed overseas in 2022, establishing subsidiaries in Tokyo, Seoul, Germany, Dubai, Los Angeles and Hong Kong, Wan said. In 2023, he said, there are plans to expand regional business from those locations while capitalizing on China’s recovery.

Earlier, Wan said Keenon has at least doubled its revenue each year, or more, from a lower base as the Chinese market grew.

Keenon has achieved unicorn status with a valuation of more than $1 billion. In September 2021, SoftBank’s Vision Fund 2 led a $200 million Series D investment round, and SoftBank Robotics announced a partnership with Keenon.

It took Keenon about five years to focus on robots in the service sector, particularly in the hospitality industry, Wan said. Your robots now serve food at restaurants like Haidilao Hot Pot or make deliveries to hotel rooms.

In China, customers pay about 2,000 yuan a month per robot, Wan said, noting that prices are higher abroad.

Wan had no details to share about IPO plans.


Year of foundation: 2020

Notable backers: eWTP Capital, Skyline Ventures

Headquarters: Canton

Home furniture brand Povison more than doubled sales last year, to more than $50 million in 2022, founder Ayden Lin said. He hopes for an IPO in three years.

The company sells primarily to US consumers through its website, which lists $2,000 marble dining tables, $1,500 wooden vanity tables and a $500 pair of velvet recliner bar stools are. The company has 100 employees in south China’s Guangdong Province and Los Angeles, Lin said.

Lin said he started working in the domestic furniture e-commerce market in China in 2017. He found that there was overproduction in the industry, but suppliers didn’t know how to adjust their business.

Lin claims part of its success is the company’s development of digital systems that allow Povison to discover areas of consumer demand and respond quickly through its 40 to 50 suppliers.

A system manages stock and divides the manufacturing process into parts, so steps like painting and gluing can be done simultaneously, Lin said. The other connects shipments to trucks that can deliver products across the United States, he said.

Valance Aerotech

Year of foundation: 2021

Notable Backers: Future Capital, Shunwei Capital, Ventech China

Headquarters: Shanghai

2022 was the year China’s first passenger plane, Comac C919, finally received local certification. A little over a year earlier, engineers who had worked on the plane formed their own start-up, Volant Aerotech, to build an electric-powered helicopter.

This technical experience gives Volant an advantage in efficiently designing aircraft that can meet regulatory requirements from the start – such as considering flights over water – said founder and CEO Dong Ming.

Volant has already built a prototype that the Chinese aviation authorities have given the green light for a test flight to take place in early 2023.

The vehicle, which is expected to be delivered in the second half of 2026, can be used in shuttle services, charter flights, tourism and package delivery, Dong said. By the end of 2027, he expects Volant to have delivered around 100 of the vehicles.

Delta Air Lines and other passenger airline operators have supported start-ups developing similar vehicles, officially known as electric vertical take-off and landing (eVTOL) aircraft.

Correction: This story has been updated to reflect that Anxinsec only works with corporations.