You can grasp everything big and small in the venture capital circle
Tencent Venture | ID：qqchuangye
"A proud, technology-first startup that learns to dance with the muddy business world."
Text/Angel Lee
Editor/Qiao Qian
Cover source/IC photo
One day around the Spring Festival in 2021, Lei Jun, founder and chairman of Xiaomi, met peng Jun and Lou Tiancheng, the two co-founders of the automatic driving company Xiaoma Zhixing. At that time, it was only one foot away from Xiaomi's official announcement in March.
The content of this meeting involved investment intentions and cooperative driving assistance projects. In the assisted driving project, the two sides have been dealing with each other several times from top to bottom.
The project is similar to Tesla's well-known assisted driving solution: Tesla is doing both hardware and software, and Xiaomi and Xiaoma Zhixing cooperate, one to do hardware, one to do software.
For Xiaoma Zhixing, if it enters the supply chain of Xiaomi car manufacturing, it can harvest a new energy vehicle company ally with great potential, thus accumulating more mass production experience.
However, "from the United States to China, the two sides did not have a happy conversation." A person close to the top level of Xiaoma Zhixing told 36Kr.
First, because at that time, Xiaoma Zhixing had just completed the C+ round of financing, with a valuation of more than 5.3 billion US dollars, which was "too expensive", and second, Xiaoma Zhixing had always been a firm follower of L4 autonomous driving (the industry classifies autonomous driving as L0-L5, and the degree of automation is increasing), "there is little interest in L2-level assisted driving".
In the end, Xiaomi bought an obscure self-driving company for 500 million yuan.
In contrast, Pony Zhixing has a dazzling aura in the technology entrepreneurship circle.
CEO Peng Jun worked at Google for seven years, was the chief architect of Baidu's AMERICAN R&D center, CTO Lou Tiancheng nicknamed "Lou Jiao", known as "China's first programming person", is a prominent figure in the computer industry. A number of technical talents from Tsinghua and Stanford have been recruited to xiaoma Zhixing, and it has also received investment from first-line venture capital institutions such as Sequoia, IDG, and Wuyuan with this lineup, and has always been the most expensive autonomous driving startup in China.
Autonomous driving is the lifeblood of smart cars, and it is also a contest between teams with top technology and capital around the world, and it is now a critical stage of commercial landing. Cooperation with car companies is a common practice of self-driving software companies: Google's Waymo and car company Chrysler have reached a deep cooperation, and Cruise has been further incubated by general motors acquisitions, both of which are industry leaders.
Pony Zhixing has also received a $400 million investment from car company Toyota, but this does not seem to be enough.
According to 36Kr, in a high-level meeting last January, Xiaoma Zhixing CEO Peng Jun first proposed the idea of "building a car": to achieve complete unmanned driving, all the hardware of the car must be controlled, and the integration of software and hardware is the best path. At that time, the cross-border car-making boom of technology companies had not yet arrived.
However, the car construction has not yet been officially announced, and Xiaoma Zhixing has encountered a double crisis of business and technology in 2021.
With the interruption of the listing process in the United States in August last year, the commercial expansion of Xiaoma Zhixing has also been broken: the original soaring truck business "Xiaoma Zhika" has been abolished, and the car-making team has been disbanded shortly after its formation. At the same time, a number of technical backbones ran away to start a business and turned into the opponents of Xiaoma Zhika.
In October, during testing in California, Pony's self-driving vehicle crashed into an isolation strip in the middle of the road, making it the first company in the world to recall L4 self-driving software.
Everyone in the circle knows that Lou Tiancheng is a technology maniac and obsessed with programming competitions, but in 2021, he and Peng Jun's Xiaoma Zhixing may really realize the cruelty of the business world: entrepreneurship is not a programming competition - as long as you give a beautiful solution, you can always win.
1
An unfinished thrill
The most recent year has been a year of drastic changes within Pony Chi Heng.
36Kr has exclusively reported that in June last year, Xiaoma Zhixing set up a car-making team of more than 10 people in Shanghai, and also dug people up from new energy vehicle companies such as Xiaopeng Motors.
In the eyes of a former middle-level employee, Xiaoma Zhixing still thinks of building a car simply, "lacking a sense of awe."
"I had always said that the goal was to drive myself, and then suddenly one day I announced that I was building a car. Once you start building a car, you'll find that the difficulties are much greater, and the money raised simply isn't enough to play. The above employee told 36Kr. He Xiaopeng, the founder of Xiaopeng Motors, has publicly stated that it takes about 20 billion yuan to build cars from 0 to 1.
Also expanding at the same time is the truck business "Xiaoma Zhika", that is, using autonomous driving technology to solve the shortage of manpower in trunk logistics. At its peak, the truck team size reached about 100 people.
These actions are happening intensively in 2021, and they are all about one thing: going public.
A person close to the top management of Xiaoma Zhixing told 36Kr that Xiaoma Zhixing had been preparing for listing for more than a year, and almost all the forces were pressed on, "the car was originally written into the prospectus." In Google Waymo's once $180 billion valuation, the truck business contributed half.
Autonomous driving is a money-burning game, and american counterparts have raised billions of dollars so far, but Google Waymo and General Cruise are backed by parent companies with deep pockets, so Waymo has not been listed so far.
However, the valuation of Xiaoma Zhixing is already very expensive in the domestic primary market, and only by crossing the hurdle of listing can there be capital to stay at the table and continue to compete with giant players.
Previously, there have also been successful listings of autonomous driving companies. In April 2021, Tucson, a self-driving truck company founded in 2015, landed on the U.S. stock market in the future, becoming the world's "first stock of autonomous driving".
According to the original plan, Xiaoma Zhixing will land on the US stock market in the form of SPAC (that is, backdoor listing, which is more relaxed than IPO listing conditions). In July last year, the senior management team led by CEO Peng Jun had begun the listing roadshow process, but the external environment changed sharply, and in August, the US Securities and Exchange Commission asked for a "suspension" of The IPO of Chinese stocks.
Xiaoma Zhixing is just one of those affected in the epicenter of this huge earthquake - before Didi went public on June 30 last year, 34 Chinese companies went public in the United States, setting a record high in history. After Didi went public, there was only one.
The inflated balloons were forced to deflate, and the rhythm of the business of Xiaoma Zhixing was directly disrupted, and the truck team bore the brunt of it.
In September last year, Xiaoma Zhixing merged the truck research and development team into the autonomous passenger car research and development team. "The company needed to unify the two technical teams to reduce some unnecessary labor costs and overhead." A former employee of Xiaoma Zhika said.
He told 36Kr that There are about 80 people in the country, and only about 10 people are left after the adjustment, and the truck team of the AMERICAN research and development center is almost completely disbanded. Many truck drivers' salaries have also been affected, and many have gone. "The truck business went back to the rhythm of a year ago overnight, taking license plates and doing tests."
Previously, Xiaoma Zhixing had provided autonomous logistics and transportation services for SF, JD.com and other companies, and after the adjustment of the truck team, the operating routes were reduced from 4 to only 2.
Pony Chika
At the same time, the "car-making" plan tends to stagnate. "More than a dozen car-making people have been placed in Shanghai, and now they are going to be driven away." It is understood that some members of the team have left to join other new car-making power companies.
"The company is too sensitive in terms of financial resources, and once there is a disturbance, the main business may be under some pressure, but the side business is devastating." A former middle-level employee of Xiaoma Zhixing sighed.
The listing was not smooth, which meant that the exploration of Xiaoma Zhixing in the past year was wasted. "A good hand is broken." An employee said.
Until the middle of 2021, Xiaoma Zhixing was one of the most spirited members of the autonomous driving entrepreneurial circle.
With the two star founders of Peng Jun and Lou Tiancheng and the self-developed self-driving technology of the whole stack, Xiaoma Zhixing has gathered about 1,000 employees in China and the United States. Industry rumors say that whenever Lou Tiancheng and Peng Jun appear in a café in Silicon Valley, a technical cowman will resign to join Xiaoma Zhixing.
Even if it competes with Google Waymo, GM Cruise, and Baidu Apollo, Xiaoma Zhixing maintains a similar level with these giant players in terms of technology research and development, mileage accumulation, and fleet operation.
Many industry insiders interviewed by 36Kr, even including the opponents of Xiaoma Zhixing, have given high praise to its technical strength, and even some investors of Xiaoma Zhixing confidently said, "The technology of Xiaoma Zhixing is far superior to everyone today."
But technology alone is clearly not enough. "Technology is particularly cattle, and the dead are more to go." Not grounded at all, how to do it? A former pony employee said to 36Kr.
There are two types of commercialization possibilities for Pony Zhixing: one is to replace human drivers and use Robotaxi (self-driving taxis) to subvert the existing passenger car travel scenario. This is the ultimate goal of Xiaoma Zhixing, but the existing technology and policies are far from mature.
The second category can be achieved faster, such as using autonomous driving technology in commercial scenarios such as truck transportation, takeaway delivery, scenic minibuses, or providing assisted driving technology solutions for OEMs, or building cars - this is also what Baidu's internal autonomous driving project Apollo calls "climbing Mount Everest and laying eggs along the way".
However, the L4 autonomous driving companies represented by Xiaoma Zhixing have shown some contempt for the second type of path. "A lot of them have been kidnapped by Google Waymo's lines and thinking." An investor focused on autonomous driving told 36Kr.
2
The Fog of Commercialization and the Culture of Engineers
Looking back, if Pony Zhixing had promoted commercial landing earlier and more resolutely, the situation might not have been so passive.
An industry insider used the phrase "waiting for the rabbit" to describe the commercial rhythm of Pony Zhixing. He believes that Xiaoma Zhixing is good at doing technical demos for autonomous driving, using technology to obtain projects such as vehicle modification, but it is not clear enough on the commercialization path.
This view has been recognized by some middle-level employees of Xiaoma Zhixing. "And the cooperative relationship between upstream and downstream, productization and these things, Xiaoma Zhixing has done relatively poorly."
Taking the truck business as an example, although Xiaoma Zhika obtained test licenses from Guangdong Province and Beijing Municipality in the first half of 2021 and began commercial operations, "to do autonomous truck logistics, you need to turn half of your genes into a logistics company and plunge into the industry." The above-mentioned industry insiders believe that the work done by Xiaoma Zhixing is still too superficial.
A former employee of Xiaoma Zhixing's truck business also told 36Kr that a long time ago, Sany Heavy Industry and Xiaoma Zhixing had a front-loading mass production cooperation, and now it is still doing, "but it has been rotten and has become a project to maintain the image."
Even in the field of L4 autonomous driving, the core business, the relationship between Xiaoma Zhixing and car companies is not ideal.
"Pony Zhixing once helped Volkswagen modify 10 Audi models for 80 million." A person familiar with the matter said. The cars also obtained a hefei autonomous driving license, but The Pony and Volkswagen have not developed a deeper relationship in the future.
Pony Zhixing self-driving taxi
Closer to Xiaoma Zhi is the Japanese car company Toyota. Since 2019, Xiaoma Zhixing has reached a cooperation with Toyota to use Lexus models to test and operate L4 autonomous driving. In Pony's Series B financing, Toyota contributed $400 million.
But Toyota is not the only choice for Pony Zhixing in automatic driving.
Internally, Toyota set up its autonomous driving division as early as 2018. Externally, Toyota has invested in Uber's autonomous driving division. As Uber sold the business to self-driving player Aurora, Toyota also forged a partnership with Aurora.
Domestically, Toyota has also invested in Momenta, a rival of Pony Zhixing. More insiders said that Toyota's self-driving connection minibus put into use at the Beijing Winter Olympics used Baidu's automatic driving technology.
"The Ponies and Toyota themselves are a good card, but there is no continuous cooperation behind them." A Ma Zhixing insider revealed that Toyota promised to give Xiaoma Zhixing a batch of new cars in 2021, but it dragged on for nearly a year to give them.
The relationship between Pony Zhixing and Toyota is not as close and unique as imagined, and Toyota has not yet announced a cooperation with Xiaoma Zhixing to mass-produce unmanned vehicles. In other words, Xiaoma Zhixing's L4 autonomous driving solution has always lacked a large car company willing to produce in-depth mass production.
A former middle-level employee of Xiaoma Zhixing told 36Kr that many commercial landings are not that Xiaoma Zhixing is unwilling to do it, but the company's engineer culture, which makes employees have constraints when doing things.
At present, the executives who speak out more frequently from Xiaoma Zhixing are almost all engineers: Zhang Ning, head of the Beijing R&D Center, and Lou Tiancheng are Tsinghua "Yao class" classmates who have worked in Google for many years; Wang Haojun, head of R&D in Shanghai, has served in IBM Silicon Valley Lab and Baidu Meiyan, focusing on big data; Mo Luyi, head of R&D in Guangzhou, was the head of NetEase game engine and was "the only female champion of the global finals of the ACM International College Student Programming Competition in the past 30 years" Li Hengyu, head of the truck business department, has worked in Baidu Fengchao System, and the unmanned vehicle team has worked.
There are not many beautiful talks between engineers in Xiaoma Zhixing, and many engineers are contestants that Lou Tiancheng dug up during the game.
An industry insider close to the top level of Xiaoma Zhixing told 36Kr: "The high-level is all from a technical background, and even the product has not been done, let alone commercialized." The technical atmosphere has advantages in the early days, but commercialization takes a little more time. ”
"Only technology is important. Employees do something other than technology, even if it is beneficial to the company, but they do not get the praise and respect they deserve, and slowly everyone is not encouraged to do related things. The middle-level employee of the above-mentioned Xiaoma Zhixing said.
Even after the downsizing of the Pony Zhixing truck team, some people still give the statement that "the technology of the Pony Zhixing autonomous truck is better than the level of players on the market", but in addition to the reputation, some people feel that the engineers of The Pony Zhixing are inevitably "proud" or even "arrogant".
In a way, "arrogant" people are easier to gather and more likely to disperse.
Driverless companies are cutting-edge technology startups, usually co-founded by engineers with similar backgrounds, but they are often broken up and separated due to differences in equity and commercialization concepts. The data and algorithms are highly confidential, and the departure of core personnel is also easy to be sued and "hunted down" by the former owners.
Such an embarrassing situation first appeared on Baidu — not widely known, the declining tech giant is the Whampoa Military Academy in the domestic self-driving industry.
In December 2017, Baidu sued Wang Jin, former vice president of Baidu and general manager of the autonomous driving division, for "infringing trade secrets." Baidu said in the complaint that Wang Jin did not return a computer when he left his job, and the memory contained important Baidu trade secrets.
The Baidu Autonomous Driving Division under Wang Jin's rule is also the most frequent and turbulent period of senior executive departures in history, and a number of technical backbones have stepped out of the Baidu unmanned vehicle team to create or join driverless companies.
Wang Jin, founder of CIIC, Yu Kai, founder of Horizon, Han Xu, CEO of Wenyuan Zhixing, Zhou Guang, CEO of Yuanrong Qixing, Gu Weihao, CEO of Mi mo Zhixing... These names occupy half of the domestic autonomous driving industry, and also expand the use of autonomous driving from the passenger car field to low-speed distribution, terminals, trunk logistics, parks and other scenarios.
The story of Pony Chi Heng also originated here. Peng Jun is the earliest pioneer of Baidu Beauty Research Center, who began to serve as the chief architect of unmanned vehicles in 2015, and Lou Tiancheng is the youngest T10-level employee in Baidu's history (T is Baidu's technical rank sequence, T11 is the highest), leading the technology research and development of unmanned vehicles. At the beginning of 2017, Peng and Lou left Baidu to co-found Xiaoma Zhixing.
The two co-founders of Xiaoma Zhixing (Lou Tiancheng on the left and Peng Jun on the right)
However, the personnel turmoil that plagued Baidu in the past is now also bothering Xiaoma Zhixing.
After the adjustment of the team of Xiaoma Zhixing Truck in 2021, the heads of autonomous driving technology at home and abroad of Xiaoma Zhixing have left to start a business.
"I was looking at the commercialization of trucks. Now that the trucks have been merged, the commercialization is not clear, so the employees of the truck team are unhappy and confused. A person familiar with the matter told 36Kr.
Sun Haowen, the core founding member of Qianhang Technology, was the head of domestic automatic driving technology research and development of Xiaoma Zhika. Qianhang Technology has received nearly 200 million yuan of financing from SF, Xiaopeng, Baidu, IDG Capital, etc., and it is reported that Tao Ji, who was the general manager of the autonomous driving division of Baidu Intelligent Driving Business Group, has joined and served as the CEO of the team;
Kinte Smart Card core R & D members Pan Zhenhao and Sun Youhan, previously the CTO of Xiaoma Zhika and the head of planning and control of the US team of Xiaoma Zhika, have received nearly 10 million US dollars in Round A financing, and xue Jiancong, former general manager of the truck company Tucson Future, also announced that he joined the founding team.
Xingjiao Technology was co-founded by Zhao Ruixuan, former vice president of strategic financing at Xiaoma Zhixing, and former Waymo technicians.
All three companies were founded in the second half of last year, after The IPO plan of Xiaoma Zhixing was shelved. The man who ran away from Pony Is becoming an unexpected competitor to Pony.
More importantly, there are already runners running through the autonomous driving business model in the industry, and there is not much time left for Xiaoma Zhixing.
3
When "gradual" becomes inevitable
For a long time, there have been two technical routes in the autonomous driving industry, leapfrog and progressive.
The former is a Robotaxi (self-driving taxi) player represented by Google Waymo and Xiaoma Zhixing, with the goal of replacing human drivers in one fell swoop and achieving L4 level automatic driving. The latter is an auxiliary driving player represented by Tesla, starting from L2 level auxiliary human driving, and finally replacing human driving.
Leapfrog players were more popular with the market in the early days. But tesla's FSD system (Full Self-Driving, "full self-driving", but actually belongs to assisted driving) after the mass production landed, not only stirred up the electric vehicle market, but also took the lead in running through the business model, for the progressive route to win back a round.
Tesla's domestic followers are also following suit.
In the case of Momenta, the company founded by Cao Xudong, a former researcher at Microsoft Research Asia, has won two investments from SAIC motor for walking on two legs with assisted driving and L4 autonomous driving.
On the one hand, its assisted driving technology is installed in the Zhiji car jointly built by SAIC and Ali. On the other hand, the L4 autonomous vehicle with overhead lidar is operating on SAIC's travel platform.
Clearly, Momenta is willing to be a compromiser, a pragmatic progressive.
In-depth cooperation with car companies in assisted driving solutions can accumulate product mass production experience and business resources at the same time - the former is an important threshold for OEMs to select suppliers, and the latter means self-hematopoietic ability.
"Although becoming an assisted driving supplier for car companies requires opening up some core technologies, at least Momenta can ensure that the company survives." An industry insider said.
This also explains why Momenta is in demand in the capital markets. In 2021, Momenta will receive more than $1 billion in financing, and shareholders such as SAIC, General Motors, and Toyota will gather. If this model continues to exert its strength, Momenta may become the number one rival of Pony Zhixing.
Pony Zhixing self-driving fleet
The harsh reality facing Xiaoma Zhixing is that due to the existence of those complex long-tail scenarios with small probabilities, L4 autonomous driving technology has never been able to truly mature.
In other words, the leapfrog route that Pony Zhixing adheres to has not yet been confirmed.
Even Waymo, which and oem Chrysler's custom-built 60,000 L4 autonomous vehicles have not yet been seen, and since 2017, it has been promoting commercialization of trucks and other businesses.
The only thing that is certain is that this is a game that only giants can afford to play.
After Google invested 11 years and burned $3.5 billion, Waymo received more than $5.7 billion in external financing after 2020; Cruise has also burned nearly $10 billion from parent company GM and investors; and According to 36Kr, Baidu's self-driving team invests more than 1 billion yuan a year.
It has been seen that the road is far away and changes direction. Tencent began to lay out autonomous driving in 2016, and once set up an unmanned driving team in the middle. But at present, Tencent has chosen to become a water delivery person for automotive vehicle research and development: providing simulation platforms, developing cloud platforms and high-precision maps.
According to 36Kr, Xiaoma Zhixing is reinvigorating and plans to list on the Hong Kong stock market within one year. But before that, it still needs to transfuse blood from the primary market.
Recently, Pony Chi Heng announced the completion of the first closing of the Series D financing, with a latest valuation of US$8.5 billion and cash flow of US$1 billion.
The ambitious goal of Xiaoma Zhixing has not changed - it announced a cooperation with car company FAW (Nanjing) to promote the large-scale application of L4 autonomous driving.
The truck business remains a key commercialization direction. At the end of 2021, Xiaoma Zhixing and Sinotrans established a joint venture company, which is expected to deploy more than 100 intelligent driving heavy trucks.
At the same time, some insiders told 36Kr that after the listing folded, Xiaoma Zhixing invested a large part of the manpower to develop the L2++ project of assisted driving: in Nansha, Guangzhou and Yizhuang in Beijing, there are often Ma Zhixing auxiliary driving vehicles without lidar on the roof of the car shuttle through the streets - this is a scene that will not appear in the past.
A proud, technology-first company is stepping down the altar and learning to dance with the muddy business world.
END
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