Segway, the developer of two-wheeled, electric-powered people movers launched by Manchester, N.H-based inventor Dean Kamen in 2001, has acquired Chinese robotics startup, Ninebot, backed by Xiaomi.
The Beijing-based maker of similar personal transport devices, Ninebot, will hold Segway as a subsidiary but will use its technology into its forthcoming products that focuses on internet-connected electric vehicles with advanced human-machine interfaces. Ninebots founder and chief executive Lufeng Gao said, “The alliance of our well-known brands will provide more convenient and environmentally friendly travelling solutions for customers,” in a statement.
The robotics company that is two-year-old began as a crowdfunded project, but now it has grown vastly to ship products to 38 countries and has manufacturing facilities in China. The announcement of the acquisition came out after Xiaomi Corp., entered in an $80 million funding round for Ninebot that consisted Sequoia Capital and the Shunwei Foundation. ” Ninebot is a fast growing short-distance transportation company backed by well-known investors. The combination of Ninebot and Segway will bring together industry-leading research, development, engineering and manufacturing, ” said Segway President Rod Keller in a video message displayed during the press conference.
“My dream or hope is to go for an IPO by mid-2017, to make it a company worth as much as $50 billion,” said Gao in a phone interview from Beijing. He also added, ” The main consideration for buying Segway was about market expansion. Segway’s intellectual property is also a consideration.” Ninebot is a profitable enterprise and has had an annual revenue growth rate of at least 400% since its inception of products in 2012, a pace it expects to sustain in 2015, he said.
Segway sells a self-balancing single-wheel vehicle in the USA market that can travel at the speed of 22km per hour up to 35km, can be controlled and tracked through smart phone and costs $850. Apart from this, it also sells traditional Segway-like scooters with handles.
Around six months ago, Segway accused Ninebot of patent breach, after a flock of Chinese competitors to the Segway scooters flooded the market and wanted to block and ban the import of rival products into the USA. Now Segway will become a wholly owned unit of Ninebot after the merger, according to their joint staatement on Wednesday which did not disclose the terms of the acquisition. This deal adds as a stepping stone to Chinese technology companies that are looking out to expand abroad through mergers and acquisition. The combined company will have a global market share of more than 60% in a short-distance transportation industry.
Segway targets on high-end customers while Ninebot targets the lower segment or the less affluent customers in the electric scooter market, said Gao. “We’ll share our resources, including suppliers and distribution channels.” The high price tag and the restrictions by cities where it can be used have reduced the sales to the individual customers, however, the products are used by police and tour groups.
Ninebot is one among the 27 startups that are backed up by Xiaomi, one of the world’s leading smart phone maker called as ‘China’s Apple.’ The company is working on to launch smart phone in EU and US after it expanded into to markets with smart phone accessories, fitness devices and headphones. Xiaomi’s founder Lei Jun recently addressed the company as internet of things company and shared his vision which is to go beyond smartphones and into the internet-connected product ecosystem. He also said the company, which itself is considered world’s most valuable startup with a valuation of $46 billion, would invest into many startups in the future.