Youju Corp is seeking financing at a valuation of 30 billion yuan.

It is reported that an embodied AI company is seeking financing at a valuation of 30 billion yuan.

Having witnessed the market for several years, I was still shocked by this figure. Just last month, this embodied AI company completed a round of financing worth 1.5 billion yuan, and its valuation doubled from 5 billion to 10 billion yuan.

It's not hard to notice that this is a typical financing rhythm for embodied AI companies these days. They raise two or three billion yuan every two or three months, and their high - base valuations can double. Moreover, a valuation of 10 billion yuan seems to be an inevitable hurdle, while the previous common milestone - the $1 billion valuation that marks a unicorn - seems to be ignored in the embodied AI circle. The reason is simple. After the Spring Festival, the enthusiasm for financing in the embodied AI field has soared, and companies are collectively aiming for the "10 - billion - yuan club", skipping the $1 billion mark.

The embodied AI company mentioned above has a good reputation in the industry. Its strength lies in its "brain", following the world - model approach. It is not in the generally recognized first - tier group; it is more like a rising star. Currently, a mainstream view in the industry is that the VLA approach can no longer solve problems, and the world - model approach is the new direction. The company's valuation increase from 5 billion to 10 billion yuan must have benefited from the trend of the world - model approach. Even Jim Fan, the chief scientist of NVIDIA, publicly stated at an event last month, "RIP VLA, long live the world model."

01

But what can support a company's valuation to rise from 10 billion to 30 billion yuan? The answer is building its own factory to produce the physical body.

First of all, in my humble opinion, this logic makes sense in business. A few months ago, I had a conversation with a veteran in the AI field (probably one of the most senior in the industry), and he gave a firm judgment: "Focusing only on a part has no future."

The hardware and software of embodied AI are highly correlated. They need to be adapted to different physical bodies and different scenarios on a case - by - case basis. Algorithms, models, and systems are far from being as easily applicable across the board as in intelligent driving. Currently, the general consensus in the industry is that the "cerebellum" and motion control capabilities are not bad, and the supply chain is complete. The bottlenecks mainly lie in data and the "brain". In addition, there are still a large number of engineering problems to be solved in the connection between the physical body, the model, and the scenario.

Therefore, for an embodied AI company strong in the "brain", heavy investment in the physical body is a significant challenge but also a step to expand its business boundaries and strengthen its moat. Considering that the embodied AI technology has not yet matured, such exploration is reasonable. Of course, in the current market, an additional advantage is that it is easy to tell a good story and raise funds, which is in line with the mainstream narrative and the needs of local governments for investment attraction.

The question is, if the 30 - billion - yuan valuation is true, is the step too big? Is the primary market too insensitive to valuations? There are quite a few aggressive cases. For example, Lingxinqiaoshou, which completed a financing round last month, was valued at 20 billion yuan, and foreign media recently reported that its valuation in the new round has reached 42 billion yuan ($6 billion).

This valuation curve makes investors restless. Not long ago, I had a chat with a partner of a technology VC firm. The firm is not large - scale but has achieved a lot in the AI field in recent years. At the end of the conversation, he said that he would welcome recommendations of good projects. This is similar to saying "let's have coffee sometime" in the industry, just a polite way to get closer. When I asked about the specific areas he was interested in, he said:

"The first three rounds, the earlier the better."

I couldn't help laughing. Normally, when asking "what are you interested in", the discussion is about the field or sub - field, such as the physical body, the "brain", AI applications, or infrastructure. But this person's focus was on the investment stage. This irrelevant answer exposed investors' valuation anxiety.

What does investing in the first three rounds mean? It means controllable costs, the opportunity to hold a high stake, and the initiative in terms of returns, liquidity, and safety margin. Especially for popular projects, investing early can bring good floating profits in the short term. The secondary market for old shares is booming, providing a lot of room for maneuver, and it even has a sense of "investing and winning".

In the "bold and unrestrained" investment cycle, many high - quality teams in popular tracks start with a valuation of 50 million yuan, 100 million yuan, or even $100 million. Small - scale funds are the most suffering group. They have limited chips and don't have the luxury of a fallback like large - scale funds. Investing early is almost the only solution. "Investing in the first three rounds" is not an isolated case but the initiative, and even the lifeline, in the hearts of many investors.

02

Human emotions are not the same. However, entrepreneurs and investors at both ends of the business plan (BP) are experiencing valuation anxiety in sync.

A young doctor from a top - tier university is preparing a project on core components of embodied AI. After the roadshow, investors only gave a valuation of 50 million yuan. The young man was very surprised and thought "something must be wrong". He thought his expectation was not high, "at least 100 million yuan". Another former senior executive of a first - tier embodied AI company, with rich experience and a well - planned business idea and team, planned to raise $100 million in the first round but was considered too expensive by some investors.

Both the whole - machine and component companies, and both the veterans and the young entrepreneurs, expressed their frustration to me. What I see is a huge gap hidden under the investment consensus, and it's even possible that the stronger the consensus, the deeper the gap.

Neither pure rationality nor pure emotion can explain any of the above behaviors. In the complex motives, I observe two inevitable forces pulling at the nerves of all players.

Firstly, the benchmarking method is prevalent, simple and crude, with the idea of "if you can do it, so can I".

The benchmarking method is not new. The primary market is used to benchmarking against mature targets in developed markets or listed companies in the secondary market to set the ceiling. This year's mainstream valuation logic is: with companies like Muxi and Minimax having market values of hundreds of billions, whether it's computing power chips, embodied AI physical bodies, or core components, as long as they are hot - topic targets, they are all expected to have a market value of at least 100 billion once listed. Coupled with abundant funds, a tolerant secondary market, and the Pre - IPO stage almost becoming a "sure - win" situation again, the primary market, which has been in a downturn for several years, has regained a substantial return space, and valuations are generally irrational.

In this context, valuations are likely to deviate from the fundamentals and become self - contained and even mechanical. I heard from an investor friend that in the first three rounds of AI hardware financing, the common "rule" is to start with valuations of $50 million, $100 million, and $150 million. For example, without any substantial change in business, a company's valuation can double in a few months, and raising funds in three consecutive rounds has almost become a basic operation. Some companies start with the excuse of "about to file for IPO", and the reason seems impeccable:

"The market value will be at least 100 billion after listing, so there must be a profit at the current valuation of tens of billions."

The FOMO (fear of missing out) sentiment is so strong that some investors even "reserve" shares in the Pre - IPO round that will start next year.

The second force is that narrative competition is greater than product competition.

We often joke that today's consensus is focused on the "14th - 15th Five - Year Plan tracks" and the "Elon Musk tracks". In fact, whether it's artificial intelligence, embodied AI, quantum computing, or commercial space, they have one thing in common: these are all cutting - edge technologies with a long way to go for commercialization, and the technologies are still in the exploratory stage and have not matured. Therefore, there is currently no unified and verifiable value evaluation standard, and it's impossible to determine the winner solely based on products or technologies. As a result, the competition often spills over to resources, capital, policies, and even public opinion, such as narrative ability, industry influence, and PR power.

The current primary market is full of complexity. The high technical threshold and difficulty in understanding are just one aspect. Some companies are keen to use various and seemingly profound terms to emphasize their leading and first - place positions. And financing ability is generally regarded as a "proof of strength" in the market. Since numbers are the most intuitive indicator, when the future is unclear, the highest valuation and the most financing are strong signals to declare who is the most powerful player.

Telling a good story to get a good valuation, using the valuation to gain an influence high - ground, and then using the influence to obtain more funds and resources, these factors reinforce each other and even form a certain cycle. The competition on the surface has largely become a race to see who can increase their valuation the fastest, who can reach 10 billion, 20 billion, or even 30 billion yuan first, and who can be the first to go public in a certain area...

What is more worthy of attention than the valuation itself is the emerging competition logic - whoever can establish market consensus first, occupy the "representative of the future" mindset first, and obtain continuous support from capital, resources, and public opinion first is more likely to gain the initiative in the next round of competition.

And valuation is both a result and a weapon.

This article is from the WeChat official account "China Venture Capital News". The author is Cao Weiyu. It is published by 36Kr with authorization.