Home decoration enterprises raise prices layer by layer by leveraging information asymmetry: Xiyun AI returns the initiative of home decoration to homeowners with AI.
Recently, XiYun AI, an AI home decoration platform featuring the "owner-led" model, announced publicly that several years after completing its 16 million-yuan angel round financing, it has officially launched a Series A financing plan with a scale of 20 million to 30 million yuan. The equity stake to be transferred in this round ranges from 10% to 15%. The funds will be mainly used for AI function iteration and user promotion on the owner side, targeting the dividend of model transformation in the home decoration sector under the current AI application track. The project was first launched in 2016. The team has been deeply engaged in the DIY 3D design track for home decoration owners for many years, and its products consistently rank top 2 in the industry in terms of market share. Combined with AI tools, it can open up a new home decoration model covering the whole process from house measurement, design, construction drawing, construction personnel confirmation to delivery.
The project was first launched in 2016, and its original entrepreneurial origin came from the team's in-depth observation of the long-standing pain points in the home decoration industry: the home decoration industry has long been ranked among the tracks with the lowest customer reorder rate. Traditional home decoration enterprises rely on information asymmetry to set up multiple intermediate links, and layer extra charges through incremental billing and other methods, which eventually leads to the whole process of home decoration being passive and helpless for owners, uncontrollable expenditure, opaque information, and unguaranteed services. The trust level of the entire industry has dropped to freezing point. At the same time, a large number of traditional home decoration companies have closed down one after another, which also means that a new industry order is brewing. The team has been deeply engaged in the DIY 3D design track for home decoration owners for many years, and its products consistently rank top 2 in the industry in terms of market share. Combined with AI, the new productivity tool, it is expected to directly open up a direct connection path between owners, constructors and the supply chain, eliminating the premium link of middlemen.
Team and Industry Accumulation
The core configuration of the team is top-tier. Li Xingbin, CEO, holds a master's degree in computer science from a UK university. In his early years, he interrupted his PhD research in chip programming at the University of West Scotland (Watt University) in the UK to return to China for entrepreneurship. He entered the 3D interior design software track as early as 2012. In the national overseas talent introduction program in 2015, he was selected as an entrepreneurial talent of the National Major Talent Project, and has more than 13 years of practical experience in the field of home decoration digitalization. Core member Chen Hongtao, with a bachelor's degree background from Tsinghua University, is fully responsible for the layout of full-link industry resources including home decoration design and construction schemes. Before joining XiYun AI, Liu Azi was a product manager at Meituan, and currently leads the work related to XiYun AI product design, user operation and organic growth. The project has been iterated stably for 10 years since its operation. During this period, it also encountered the core contradiction between user growth and software revenue: if you want to rapidly expand the scale of owner users, you can only cancel the original annual software fee charging model. Eventually, the team explored a differentiated balance path: fully open the usage rights to C-end home decoration owners for free, and instead charge service fees from B-end merchants in the office furniture industry, successfully solving the conflict between growth and commercialization. Up to now, the platform has accumulated 700,000 home decoration owner users and 20,000 B-end users in the office furniture industry.
Make Design Truly Free, Make Information Truly Transparent
Relying on the strategic cooperation support of leading space scanner manufacturers, XiYun AI only takes 5 to 10 minutes to generate an accurate 3D house type with an accuracy error of 1 to 2 centimeters. Based on the real house type of a single household, AI will automatically generate 300 sets of full-dimensional and implementable whole-house decoration schemes, and automatically complete the calculation of main materials and output of construction drawings at the same time. All products in the schemes are real 1:1 products sold on leading e-commerce platforms. Users do not need professional design capabilities to freely adjust design details on mobile phones, tablets and PCs.
Different from most home decoration design tools on the market that rely on general AI large models for shell wrapping, the capability base of XiYun AI is precipitated with the massive 3D space models and home decoration product database accumulated by the team for more than ten years. There is no need to upload the 3D model of products, and high-definition rendering renderings can be generated only by the house type drawing and the actual photo of the product. All products in the picture come with jump anchors, and owners can click to directly jump to the corresponding e-commerce product page to check the price, specification and evaluation, completely breaking the information barrier of the traditional home decoration industry. At present, the commercialization path of the project has been verified, and the revenue mainly comes from the diversion commission of foremen and the transaction commission of jump links for e-commerce home products. The whole process does not need to bear the mode burden of expensive traffic and heavy operation of traditional home decoration enterprises.
User Pain Points Are the Driving Force for Industry Transformation
The core challenge facing the current project comes from the capital investment in large-scale promotion. The team did not choose the path of extensive advertising, but polished more simplified AI functions that are close to the actual needs of owners, deeply cultivated word-of-mouth communication on content platforms where owners gather such as Xiaohongshu, and achieved organic traffic growth relying on the spontaneous sharing of 700,000 existing settled owners. At present, the monthly number of organic registered users is stable at about 10,000. Many test owners feedback that in the past, home decoration companies kept promoting with renderings, and they were in a passive position throughout the process. Now after getting the design scheme of their own house type on XiYun AI, the whole family can adjust the style and replace furniture online together, the material consumption and total price are clear at a glance, and they don't have to worry about being charged extra price by intermediate links during procurement. The whole process of participating in home decoration design has become a common fun for the family.
Talking about the insights gained from more than ten years of entrepreneurship, Li Xingbin said that all the places that users are dissatisfied with in the home decoration industry are opportunities for transformation. As a new productivity tool, AI's ultimate role is to return the full initiative of home decoration to the owners. In the future, XiYun AI plans to further popularize the capabilities of AI design and automatic product selection. XiYun AI will make home decoration design completely de-professionalized just like automobile driving in the past, and finally realize more than 90% of automated home decoration design and more than 95% of online transactions of home products, completely rewriting the operating rules of traditional home decoration enterprises that maximize profits by taking advantage of non-transparent design capabilities and material prices, while owners can only passively accept.
It is often not the players inside the industry that can bring transformation to the industry. The business models of some existing home decoration companies are deeply bound to material profits and construction subcontracting profits. Without these profits, they will lose their main source of profit, and the generation of these profits further confirms the middleman attribute of some home decoration companies. AI will eventually make home decoration an industry led by owners, with transparent design, transparent materials and transparent labor, that can satisfy consumers.