Deal focus: VCs back founder’s hardware pivot

"Alone Across Australia" is a 2004 documentary that follows adventurer Jon Muir as he completes a 2,500-kilometer, 128-day unsupported crossing of the Australian desert. It is self-filmed, so Muir would repeatedly hike to an elevated position, set up a camera, walk back to his starting point and then retrace his steps in order to capture himself in the vast landscape.

Mengqiu Wang, a computer science graduate with a penchant for outdoor sports, saw Muir's documentary at a film festival in 2005 in the US, where he was studying. "What if he had a flying camera that could follow him and document his life?" Wang asked himself. This was where the idea for the Hover Camera was conceived.

Wang's start-up, Zero Zero Robotics, recently exited stealth mode, and the Hover Camera is primed for commercial release this summer. They have capital to spend on marketing and mass production, having raised a $1.7 million seed round in 2014 from IDG Capital Partners, GSR Ventures and ZhenFund, and more recently a $23 million Series A led by Zhejiang United Investment Group (ZUIG). The post-money valuation is said to be $150 million.

However, the path from conception to production has not been smooth. When the seed investors first met Wang he wasn't even working on a hardware product; his attentions were focused on a mobile app for e-commerce. Wang had seen similar business models get traction in the US but he soon realized that it wasn't a good fit for China. Then came the pivot.

"They are a really strong tech team, with backgrounds in artificial intelligence and robotics, and the drone industry was getting hotter. So they went back to what they were good at, they completely transitioned," says Anna Fang, CEO of ZhenFund. The key factor for her was Wang himself: "It's our investment philosophy to back strong people and he's one of the best founders out there."

The Hover Camera differs from a standard consumer drone in several respects. At 238 grams, it is below the weight threshold that requires hobbyist drone registration with the US Federal Aviation Administration or the equivalent Chinese authority. It is also portable and powered by propellers that sit within rather than outside the frame, which makes the device easy to handle and safer for indoor use.

The barriers to entry lie in combining this portability with stabilization technology, which keeps the onboard camera steady. The device, operated through an app or directly via buttons on the casing, is already able to track the face and body, but future iterations are likely to be intelligent enough to know how to position people in a picture.

However, the team's immediate goal is improving the user experience and getting ready for mass production. In the latter respect, ZUIC was an attractive investor. "The eight LPs include some significant manufacturers," Wang says. "They had the resources to conduct due diligence on us and see that the story is sound. And I really wanted to talk to them."

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• Topics
• Greater China
• Early-stage
• Technology
• ZhenFund
• GSR Ventures
• IDG Capital Partners