May 25, 2022

Rising Chinese rival Nuro has targeted the U.S. delivery market and raised seed capital to make its ambition a reality.

Whale Dynamics, a Shenzhen-based self-driving startup founded by Baidu veteran David Chang, says it has closed a seed round worth about $2.5 million. Beijing-based Qianchuang Capital, an investment firm run by giants of China’s major financial institutions, led a round involving Shangbang Huizhong, a Chinese developer-backed fund.

Founded in 2018, Whale Dynamic has developed a Neuro-style unmanned van that aims to eliminate the steering wheel and driver’s seat. And like Nuro, whose delivery bots are made by BYD, it is contracting with a Chinese manufacturer to build its self-driving cars, whose names have not been released as the deal has yet to be finalized.

Whale Dynamic’s modest advantage over Nuro is cost, suspects Chang, who worked as a product manager for Baidu’s intelligent driver group. Nuro assembles parts in the US, while Whale Dynamic’s vehicles are built entirely in China from production to assembly, giving it a cost advantage over its US counterpart. Each car costs about $20,000.

The latest cash injection allows Whale Dynamics to expand its current team of 30 employees and explore product use cases in China and the US. Led by Huawei CTO Qi Wei, the company plans to test its first prototype car in several Chinese cities in May.

In China, Whale Dynamic faces competition from retail tech giants like Meituan and JD.com, which began testing their delivery vehicles last year. Chang believes his company’s technology, which takes the slower and more expensive path of R&D and testing on passenger cars rather than directly building boxes on wheels, will stand the test of time better.

Whale Dynamic test fleet with passenger cars

Over time, Chang wants to establish his business in the US and focus on courier services and supermarkets. “In China, you can test much faster and at a lower cost,” Chang explains why he started in China.

While regulators in China and the US are watching tech companies more closely for potential national security threats, companies scattered across both countries will have to follow stricter rules or side with them. TuSimple, a California-based autonomous trucking company backed by a subsidiary of Chinese social media giant Sina, is looking to sell its Chinese arm, Reuters reported.

The majority of TuSimple vehicles operate in the US, with a small fleet in China. But US regulators have raised concerns about the company’s Chinese origins and access to data from the Chinese office, which reportedly prompted TuSimple to bail out its Chinese arm.

According to Chang, safety compliance is a priority for Whale Dynamic. When it enters the US market, the startup will choose US cloud services such as AWS and Google Cloud; The Chinese team is only engaged in the development of equipment. The company’s main suppliers are also American: Oster for lidar (and Israel’s Innoviz with offices in the US), as well as Nvidia and Intel for chips. Unlike Nuro, which operates its own fleet of vehicles, Whale Dynamics plans to offer only turnkey vehicles and software as a service, leaving the operating side to its customers aggregated by the startup. . should be limited.

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