The Chimes of Change in the Robotics Industry: More Money, but More Companies Going Under?
Hello, everyone, and welcome to your financial news analysis. Recently, in September, something quite interesting—and somewhat counterintuitive—has happened in the venture capital world.
On one hand, things have been hot: Data shows that in the first eight months of 2026, the robotics sector raised a whopping 124.51 billion yuan in funding, more than twice the amount raised throughout 2025. Capital has flowed in like a tide, eager to catch the next big opportunity.
On the other hand, there have been chilling developments: Suzhou-based Zhicheng Power (which makes pool robots) and the robotics subsidiary of Shanghai-based unicorn DeepBlue Technology have both been reported to be undergoing bankruptcy proceedings or liquidation. Adding to this list are several domestic and international robotics companies that have failed earlier this year, making 2026 seem like a year of significant reshuffle for the robotics startup scene.
More money has been invested, yet more companies have collapsed. Is this a contradiction?
Not at all. This actually indicates that the robotics industry is undergoing a harsh “rite of passage.” In the past, people were interested in stories and technological demos, but now the focus has shifted to whether a company can make money and whether its cash flow is stable. Those companies that could only talk the talk and couldn’t manage their finances were the first to be eliminated by the market.
Today, we’ll break down the reasons behind the failures of two typical companies in simple terms and discuss the lessons this holds for both ordinary people and investors.
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Zhicheng Power: Focusing on Quality, but Losing Stability
Zhicheng Power had a impressive background. Its founder is a doctor, and its team came from companies like Microsoft, Xiaomi, and DJI. Investors included well-known firms such as Xianfeng and Qingliu, with even Covus contributing funds. Their product—a wireless pool cleaning robot—was well-made, targeting the European and American markets, with prices ranging from $300 to $1,500, and their cumulative sales once approached 100 million yuan.
So why did they fail? The core issue was that their business model was too heavy for their cash flow to support it.
1. Seasonality was a major challenge: Pool robots are highly seasonal, with demand mainly in the summer (May to August). This meant the company had to stock up heavily during the off-season and send the products to overseas warehouses, waiting for the peak sales season.
- Peak season: Not enough products meant lost orders.
- Off-season: Unsold products piled up in warehouses, straining cash flow.
It’s extremely difficult to manage this cycle, and a slight misstep could lead to a cash flow crisis.
2. After-sales support was a costly burden: Selling hardware is not the hard part; the real challenge is providing maintenance. Zhicheng Power set up nearly 10 local repair centers in Europe and America. Repairing and replacing parts, along with labor costs, became a significant expense. The larger the scale, the higher these hidden costs. Without sufficient sales, these fixed costs could crush a company.
3. Stranded in a difficult position: The global pool robot market was dominated by leading players like Maytronics from Israel and Fluidra from Spain. In the rapidly growing wireless segment, the top five companies were all Chinese (such as Wangyuan and Xingmai). Zhicheng Power lacked the scale to reduce costs and had to compete on price in the mid-to-low-end market. As a result, the more they sold, the more they lost; not selling enough meant they couldn’t survive.
4. Final struggles: Starting in May, the company became a debtor, and after a court investigation, no assets were found to enforce payments. In the end, they filed for bankruptcy. Whether this was a last-ditch attempt to restructure and get rid of debts or a sign of complete exhaustion remains unclear, but their cash flow chain was clearly broken.
💡 In simple terms: Zhicheng Power was like a high-end hot pot restaurant that only opened in summer. The decoration was luxurious, and the ingredients were fresh, but in winter, they had to pay rent, salaries, and stock up on ingredients. If business wasn’t booming in summer, they had to close. They lost due to Poor timing and high costs.
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DeepBlue Robotics: Trying to Do Too Much, Ending Up Doing Nothing
If Zhicheng Power failed due to a lack of focus, DeepBlue Robotics died from overambition.
DeepBlue Technology itself is a well-known AI unicorn with significant investments. Its robotics subsidiary tried a diversified approach, developing products for indoor cleaning, outdoor cleaning, disinfection, and delivery, as well as entering the medical device, automotive parts, and new energy equipment markets.
Sounds impressive, right? But the reality was harsh:
1. Promised orders were unfulfilled: The company claimed to have tens of thousands of orders, with a Changqiu factory planning to produce 20,000 units per year. However, media investigations revealed that most of these orders were not realized, and the products remained at the demonstration or sample stage. In other words, painted figures on a PowerPoint don’t equal real cash in the bank.
2. Slowly losing money until a major crisis: Problems started in 2023 when the Changzhou branch began defaulting on salaries. In 2024, the parent company raised several hundred million yuan in pre-IPO funding, which employees hoped would save them, but the money didn’t go to them and didn’t solve their debt issues. By the second half of 2025, with no other options, employees had to file for bankruptcy.
3. The parent company’s drastic move: DeepBlue Technology quickly announced it wasn’t going bankrupt but cut off funding for the robotics, industrial intelligence, and agricultural intelligence divisions, focusing only on its core businesses in AI healthcare and aerospace.
💡 In simple terms: DeepBlue Robotics was like an apprentice trying to learn swimming, driving, cooking, and computer repair simultaneously. They picked up a bit of each skill but didn’t master any. When the boss (the parent company) realized the apprentice was losing money, they decided to let go. They failed due to lack of focus and ability to execute their plans.
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2026: A Critical Year for the Robotics Industry
You might ask, why 2026 specifically? It’s not a coincidence; it’s a result of industry trends.
1. Shift from hype to reality: From 2023 to 2024, AI and robotics were in the spotlight, and capital was willing to support promising ideas. But in 2026, investors became more pragmatic. They no longer asked about how impressive the technology was but about profit margins, payment cycles, and supply chain stability. A great tech demo doesn’t guarantee commercial success. Many companies had great technology but lacked the skills to turn it into profit and manage cash flow.
2. A universal test of commercial viability: The failing companies came from various sectors, including pools, medical devices, humanoid robots, services, and agriculture. This shows that the issue is systemic across the industry. Robotics requires long-term development, with challenges in hardware quality, component supply, overseas warehouses, and after-sales support. Companies that hoped for quick success were doomed to fail.
3. Easy to fund, hard to survive: It’s easy to get funding (124.5 billion yuan shows this), but sustaining success is another matter. In the past, getting the next round of funding meant survival. Now, if funding delays or market valuations drop, companies must rely on their own capabilities. Most startups haven’t yet learned this and have already run out of resources.
💡 In simple terms: 2026 is a year of health check-ups for the robotics industry. In the past, people focused on look (technology); now, they’re looking at financial health. Companies with weak foundations won’t survive this test.
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Lessons for Everyone and Investors
What can we learn from these cases?
1. Don’t be misled by the “unicorn” label: DeepBlue Technology was a unicorn, but its robotics subsidiary still went bankrupt. A unicorn status doesn’t guarantee safety. When investing or looking for a job, assess the profitability of the specific business, not just the company’s reputation.
2. Be cautious of heavy assets and seasonal challenges: If you’re starting a business or investing, ask yourself:
- Is my product highly seasonal?
- Are my after-sales costs high?
- Can my cash flow withstand the off-season?
If the answers are yes, be extra cautious.
3. Focus is more important than diversification: With limited resources, concentrating on one area often leads to better results. DeepBlue Robotics’ failure shows that trying to do too much often results in doing nothing well.
4. Cash flow is the lifeblood of a company: No matter how advanced the technology, a broken cash flow means death. Both Zhicheng Power and DeepBlue Robotics failed due to cash flow issues. For entrepreneurs, surviving is more important than achieving greatness.
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Looking to the Future: Will the Robotics Industry Disappear?
Certainly not. The robotics market is huge, especially with the aging population and rising labor costs, making robot substitution a clear trend.
However, future robotics companies will show a polarization:
- Leading players with strong supply chains, stable cash flows, and mature after-sales networks will dominate the market.
- Weaker companies that can’t manage their finances or execute their plans will be eliminated.
The reshuffle of 2026 is a sign of the industry maturing. It means that robotics entrepreneurship is no longer about genius but about effective management. Only those who can handle supply chains, cash flows, profit margins, overseas channels, and customer service will thrive.
Finally, here’s a quote for you:
On a windy day, even a pig can fly. But when the wind stops, only the pigs with wings (solid management skills) can continue flying.**
I hope all entrepreneurs develop the skills needed to succeed in this rapidly changing industry.