A nascent Nuro challenger from China has its sights set on the US delivery market and has just raised some seed funding to further its ambitions.
Whale Dynamic, a Shenzhen-based autonomous delivery startup founded by Baidu veteran David Chang, said it has closed a seed round of around $2.5 million.
Qianchuang Capital, a Beijing-based investment firm run by veterans of China’s top financial institutions, led the round, with participation from Shangbang Huizhong, a Chinese fund backed by real estate developers.
Founded in 2018, Whale Dynamic is developing Nuro-like driverless delivery vans that are intended to do away with the steering wheel and driver’s seat. And like Nuro, whose delivery bots are made by BYD, it contracts with a Chinese manufacturer to produce its autonomous vehicles, whose name cannot yet be revealed because the deal has not been closed.
Whale Dynamic’s slight advantage over Nuro lies in cost, surmised Chang, who worked as a product manager in Baidu’s intelligent driving group. Nuro assembles parts in the US, while the entire production of Whale Dynamic’s vehicles, from manufacturing to assembly, takes place in China, giving it a price advantage over its US counterpart. His vehicles are priced at around $20,000 each.
The latest financial injection will allow Whale Dynamic to expand its current team of 30 employees and explore product use cases in China and the US in some Chinese cities in May.
In China, Whale Dynamic faces competition from retail tech giants like Meituan and JD.com, which began testing their own goods-only delivery vehicles last year. Chang believes that his company’s technology, which takes the slower and more expensive route of doing R&D and testing on passenger cars rather than building the boxes on wheels directly, can better stand the test of time.
Eventually, Chang wants to set up his company in the US and target express delivery services and supermarkets there. “You can test things much faster at lower costs in China,” Chang explained of why he started in China.
As regulators in China and the US increase scrutiny of tech companies for potential national security risks, companies that straddle the two countries will either have to heed increased regulation or take sides. . TuSimple, a California-based autonomous truck company backed by a subsidiary of Chinese social media giant Sina, is looking to sell its unit in China, Reuters reported.
Most of TuSimple’s vehicles operate in the US, with a smaller fleet in China. But US regulators have raised concerns about the company’s Chinese background and access to data from its China office, which reportedly led to TuSimple’s decision to ditch its China unit.
Safety compliance is a priority at Whale Dynamic, Chang said. When entering the US market, the startup will opt for US cloud services such as AWS and Google Cloud; your China team will take care of hardware development only. The company’s key suppliers are also American: Ouster for lidar (and Israel-based Innoviz, which has offices in the US) and Nvidia and Intel for chips. Unlike Nuro, which operates its own fleets, Whale Dynamic plans to offer only off-the-shelf vehicles and software as a service, leaving the operational side to its customers, which should limit the amount of sensitive data the startup can collect.