Invested by HSG and Tencent, another star IPO is about to be born in Shenzhen.
In 2026, the popularity of smart hardware continues to rise. At the just - concluded CES, smart hardware became a hot topic. Xtool, a laser engraving machine company from Shenzhen, also submitted an application for listing on the main board of the Hong Kong Stock Exchange at the beginning of the year.
It is not uncommon in media narratives that consumer hardware has shifted from being a "niche" area to a "booming" one. Whether it's the crowded cafes in Shenzhen filled with investors or the situation where entrepreneurs from the "DJI ecosystem" are being pursued by institutions, it all indicates that the trend has arrived.
In the article "FA Moved Their Offices Next to DJI", China Investment Network once analyzed the logic behind the current popularity of consumer hardware. On one hand, China's strong supply - chain advantage makes hardware an attractive choice for entrepreneurs. On the other hand, the successful listing of Insta360 has further boosted investors' enthusiasm for hardware.
Besides, I think there are two core driving forces worth noting:
Firstly, the empowerment of AI technology. In previous CES events, AI was rarely discussed in - depth. However, this year, the official theme was defined as "AI Inside Every Hardware", officially declaring that AI has become the core of every hardware device.
Secondly, the wave of going global provides support. Taking Xtool as an example, it is a typical brand that "started from overseas" first, thus avoiding the fierce competition in the domestic market and directly tapping into rich profit margins in the global niche markets.
"The First Stock in the Consumer - Grade Laser Engraving Machine Sector"
In August this year, Insta360 successfully listed on the stock market, with its market value once exceeding 120 billion yuan. This quickly heated up the previously quiet consumer hardware sector. Capital's attention has returned to those once - marginalized hardware categories.
Take consumer - grade 3D printing for example. Not only has Tofu 3D Technology, a unicorn with a market value of over 10 billion yuan, emerged, but also new forces like KuaiZao Technology have appeared. KuaiZao Technology raised hundreds of millions in its Series B financing, jointly invested by Meituan and Hillhouse Capital, which shows the high level of capital enthusiasm.
The laser engraving machine sector where Xtool operates is almost "closely related" to consumer - grade 3D printing. If it successfully lists this time, Xtool is expected to become "the first stock in the consumer - grade laser engraving machine sector".
Xtool was founded in 2021. Its founder, Wang Jianjun, was born in 1985 in Taihu, Anhui, and graduated from Northwestern Polytechnical University. As early as 2013, he founded Makeblock, focusing on STEAM education solutions, providing robot kits and programming platforms. However, Wang Jianjun once said in an interview that he never simply defined his company as an "education company" or a "robot company", but always regarded "innovation and creation" as the core genes of the enterprise.
Around 2020, the COVID - 19 pandemic hit the procurement demand in the STEAM industry, and the company once suffered an annual loss of over 10 million yuan. This forced the team to start thinking about the transformation direction. After market research, they keenly captured the rise of personal creative culture in Europe and the United States and decided to shift their focus to the consumer - grade laser engraving machine market. In 2021, Xtool launched its first desktop laser engraving machines, the xTool D1 and xTool M1, officially entering this new sector.
Public information shows that Xtool has completed a total of five rounds of financing since its establishment. In 2015, it completed a Series A financing led by Sequoia Capital China, with a total amount of 6 million US dollars. In 2017, it completed a Series B financing led by Shenzhen Capital Group, with Sequoia Capital China, EMC, TMC, etc. participating, and the total financing reached 200 million yuan. In 2018, it completed a Series C financing led by CICC Jiazibian, with Guangxin Capital, Langmafeng Venture Capital, Yuexiu Industrial Fund participating, and the total amount was 300 million yuan. According to the prospectus, in 2025, the company completed a Series D financing led by Tencent.
In terms of performance, the company is still in a period of rapid expansion. In 2023, 2024, and the first nine months of 2025, the company's total revenues were 1.457 billion yuan, 2.476 billion yuan, and 1.777 billion yuan respectively. At the same time, the net profit margin showed a downward trend year by year, at 7.6%, 6%, and 4.7% respectively, corresponding to net profits of 111 million yuan, 149 million yuan, and 83.112 million yuan. The adjusted net profit performance was relatively stable, at 183 million yuan, 258 million yuan, and 172 million yuan respectively.
Most Revenue Comes from Overseas Markets
Capital's enthusiasm for hardware stems from a proven "formula", that is, the comprehensive ability of "technology + product + supply chain + going global".
"Going global" is an important development line for Xtool. In terms of revenue composition, the vast majority of Xtool's revenue comes from overseas markets, and the proportion of the European and American markets is 85%. According to financial report data, in the first nine months of 2025, the company's revenue from the United States reached 973 million yuan, accounting for 54.8%; the revenue from the European market was 538 million yuan, accounting for 30.3%; and the revenue from other regions was 266 million yuan, accounting for 14.9%.
Similar to most hardware products' way of opening up overseas markets, Xtool initially launched a project on the overseas crowdfunding platform Kickstarter. When founding Makeblock, Wang Jianjun regarded Kickstarter as a platform for crowdfunding and financing. Relying on his familiarity with the user ecosystem there, Xtool's early products achieved good results. Among them, the M1 raised 2.6 million US dollars on Kickstarter, not only ranking first in the laser - related crowdfunding that year but also ranking seventh in the technology category.
Selling products overseas is just the first step. Xtool has entered the stage of local operation in some regions. In November last year, Xtool held the unveiling ceremony of its European regional office in Berlin, Germany, and debuted its flagship desktop laser engraving machine, the F2 Ultra UV, in the European market for the first time, marking the substantial start of its local operation in the European market. According to statistics, Xtool already has more than 300 demonstration halls and more than 40 service stations in Europe, which can provide offline pre - sales experience and after - sales maintenance services for local European users.
In addition to technology, Xtool also has mature strategies in product development and marketing. In product development, Xtool has established a closed - loop of "collecting needs through live - streaming - rapid R & D response - verifying with user feedback". For example, the fire alarm safety function and the six - layer filtered smoke purifier all originated from the pain points in users' actual scenarios, which greatly enhance users' enthusiasm for giving suggestions and creating content at the underlying logic level.
At the same time, Xtool has established a content ecosystem covering Instagram, TikTok, YouTube, Facebook groups, and its self - operated community, Atomm, and conducts targeted content operations according to the user attributes of each platform.
Investors Flock to Shenzhen
In addition to forms such as glasses, headphones, and 3D printing, many of the hardware startups in this wave are targeting completely new categories.
It is obvious that the directions of hardware entrepreneurs are becoming more and more segmented and vertical. For example, there is a very small and portable outdoor shower. You can take it, find a water source, and enjoy a shower outdoors. Another example is a desktop wind tunnel specially designed for model cars, which can simulate wind - direction changes and visualize airflows. There is also an AI tennis robot that can play real - time matches and conduct real - time AI data analysis, serving as a personal coach.
From the user's perspective, the in - depth empowerment of AI technology is continuously lowering the threshold for product use. The structural dividends brought about by the underlying technological innovation have injected long - term growth momentum into the industry. At the same time, the global "leisure economy" is expanding rapidly. The emotional value carried by personalized creation has become a core necessity in the digital age, driving the product audience to expand from professional groups to family users, handicraft enthusiasts, and brand retail terminals.
When discussing hardware, it's hard to bypass Shenzhen. In November last year, the INNO100 Global Innovation Flagship Store officially opened at the Shenzhen Bay Cultural Square. This is the first officially authorized store of Kickstarter in China. The store displays a large number of cutting - edge innovative products, including many new projects that have just completed overseas crowdfunding but have not been officially launched in China. At this year's CES unveiling exhibition, "AI + hardware" was the absolute protagonist, and a significant portion of the star products were from Chinese manufacturers, with Shenzhen being almost the most core origin.
Behind this, on the supply side, the supply - chain system represented by Huaqiangbei has been continuously lowering the technological threshold and product prices in the face of homogeneous competition and intense involution. From another perspective, this is actually promoting the "equalization" of the supply chain: when the manufacturing ability becomes more and more standardized and the acquisition cost becomes lower and lower, the real differentiator is no longer "whether you can make it" but "what to make", "how to make it", and who can establish long - term advantages in product creativity and brand building.
This advantage is driving more and more investors to flock to Shenzhen. Even though the Spring Festival is approaching, the enthusiasm shows no sign of waning.
However, a friend who is an investor and just finished inspecting projects in Shenzhen recently shared his observation with me - he is more inclined to "observe more and act less" towards smart hardware. He believes that although AI hardware seems bustling, with a fast financing pace and good stories to tell, it's not easy to invest in. The difficulty lies in that from 0 to 1, it can often rely on the founder's personal ability to push forward forcefully; from 1 to 10, the real market demand must be verified; from 10 to 100, it truly enters the stage of scale and commercialization. Throughout the process, factors such as luck, cycles, and market sentiment are inevitably involved.
"This market is quite fragmented, and many projects are still in the very early stage. If I really decide to invest, I'll choose projects that follow the 'large - scale inventory' logic, where the product can be projected to rank among the top in its niche category, have a large enough scale, and the overseas business has shown an obvious upward inflection point." In his view, it's easy to misjudge hardware projects that are too early, and at the same time, their valuations are often inflated. Projects like Tofu 3D Technology are hard to come by.
This article is from the WeChat public account "Dongshisi Tiao Capital" (ID: DsstCapital), written by Wei Xianghui, edited by Liu Yanqiu, and published by 36Kr with authorization.