(Yicai) April 15 -- China’s embodied artificial intelligence sector completed at least 269 funding rounds in the first 100 days of this year, as investors pile in with a "better to invest and be wrong than miss out" mindset, making it one of the country’s hottest investment areas.

Embodied AI companies raised CNY34.5 billion (USD5 billion) in the first 100 days of the year, based on 122 disclosed deals tracked by venture capital data platform IT Juzi. By comparison, the entire sector raised CNY58.7 billion in the primary market last year.

The startups that secured funding are involved in areas such as “brain” algorithms, motion control, robot hardware, dexterous hands, training data and the development of real-world application scenarios.

It is normal for a bubble to emerge in the embodied AI sector in the short term, several interviewees told Yicai. Right now, most investors are thinking "it is better to invest and be wrong than miss out," and they will consider the investment successful so long as some of the companies they back survive.

An investor said that his workload has been much more intense this year than in the past. With so many investors competing, investment firms are now vying for a stake in some of the most popular embodied AI projects.

Due to the large number of investors, a significant amount of capital is flowing into a few star projects, an investment institution insider told Yicai. Some popular projects are being chased by multiple funds, resulting in a situation where "the more money a firm has, the easier it is to raise more.”

This has also led to at least 15 fundraisers of CNY1 billion (USD146.6 million) or more so far this year, compared with only about three such deals in the first half of last year.

The largest single deal in the first 100 days was by Galbot, a startup focused on embodied multimodal large-model general robots. It raised CNY2.5 billion (USD366.6 million) in early March, setting a new record for a single funding round in the sector.

The top company by total funding so far is Galaxea, a startup developing embodied AI solutions, which raised a combined CNY3 billion across two funding rounds in February and early April.

A wide range of investors, including national industrial funds, industrial capital and top-tier venture capital firms, have taken part in this latest wave of investment in embodied AI.

Market Potential

“Driven by spillover effects from multimodal large-model technology, embodied AI has become a key target for capital investment thanks to its diverse application scenarios and huge market potential,” Liu Yinghang, a partner at Scale Partners which has led the financing of several leading embodied AI startups, told Yicai.

Investor confidence in China’s cutting-edge tech development, along with supportive policies such as a dedicated fast-track listing channel for hard-tech firms on the Hong Kong Stock Exchange, have also fueled the investment boom since the start of the year, he added.

Last year, venture capital firms focused more on a startup’s technical potential and founding team, Liu said. This year, however, they are paying more attention to commercialization prospects, business maturity and initial public offering potential.

Editors: Tang Shihua, Kim Taylor