(Yicai) Sept. 25 -- Dreame Technology has refuted a social media post that alleged that the Chinese manufacturer of robot vacuum cleaners is compelling employees to invest in its own private equity fund.

The fund has always adhered to the investment principles of marketization, specialization, and compliance, and has never formulated or established mandatory investment policies or regulations within the company, Suzhou-based Dreame announced today.

Dreame is forcing staff to invest at least CNY10,000 (USD1,370) each in the fund, a recent social media post alleged, adding that those who do not invest will be the first to get laid off. Yicai contacted the poster but received no reply, and the post was deleted yesterday.

Dreame said the fund has initiated legal proceedings against the institution or individual who maliciously fabricated and spread the false information on the internet, seriously damaging the company’s reputation.

In August last year, Dreame set up its own robotics industry venture capital initiative, which consists of a growth-stage strategic fund and an early-to-mid-stage incubation fund. The growth-stage fund has already raised most of its CNY10 billion (USD1.4 billion) target.

Based on the online post, the fund’s co-investment model does not necessarily breach compliance rules and may not imply a mandatory investment, a source in private equity told Yicai. “Dreame could present it as sharing wealth with the staff, but there are potential risks,” the person said.

Regulatory guidelines allow PE fund managers and their staff to invest in funds without meeting the general investor asset threshold. However, when staff participate through an employee shareholding platform, the minimum contribution must still be no less than CNY1 million (USD140, 400).

Founded in 2017, Dreame makes robot vacuums and floor washers. According to International Data Corporation, it held a 10 percent share of the global household cleaning robot market in the first half of the year, ranking third after Roborock Technology at 15 percent and Ecovacs Robotics at 14 percent.

At the end of last month, Dreame announced plans to enter the automotive sector, aiming to launch its first ultra-luxury electric car in 2027 to compete with the Bugatti Veyron. Earlier this month, the firm said it will build an auto plant next to Tesla’s gigafactory in Berlin.

Addressing public skepticism, Dreame’s founder and Chief Executive Officer Yu Hao said that the company’s vehicle project was not just a marketing move but a proper business, adding that it had made financial studies and could afford the investment.

The company also unveiled its first premium smartphone, the Dreame Space, claiming it had secured overseas preorders worth CNY100 million (USD14 million).

Dreame’s revenue doubled to CNY15 billion (USD2.1 billion) last year, though its profit margin slipped to 42.3 percent from 48.7 percent.

Editor: Futura Costaglione