Yuanda filed for bankruptcy and was taken over (02.04.22)

Addendum: The article was published on 09.02.22. On 02.04.22 the two founders Kotlaski and Ortmair announced together with Philipp Georgi to have taken over the company to continue it. On 01.07.22 an article was published with the final information for the time being.

I have considered for some time whether I should publish this message. Because on the one hand there can theoretically (see below) still be talks, On the other hand I was already approached from the industry, so that the info about the insolvency made the rounds long ago. After all, the filing was already made on 19.01.2022. In this respect, all those directly involved in the insolvency had a head start. After today the Finance magazine and others report on the insolvency, it is public. And perhaps, by means of this publication, an investor will be found who is interested in a takeover. This investor may already exist (see below).

Company history

Yuanda was founded in Hanover in 2017 and can be described as a spin-off of the university there. The shareholders were the Chinese Shenyang Yuanda Alumimium Group (70%) and the German technical heads (30%). The (industry-foreign) Chinese partners were to manufacture and develop the rapid Chinese market. 2018 saw the first trade fair appearance and the presentation of the "Yu". The name was derived from the English "unique". Because the "Yu" should combine AI incl. image recognition, connectivity and security. The speculative price of €10,000 mentioned here at the time (based on the Chinese background including production there and the relatively low payload) turned out to be completely wrong. The "Yu" cost almost 30,000 €. The "Yu" remained the only product for more than four years and, according to my information, was still struggling with approval in the fall of 2021.

Standstill around 2020, expansion in 2021

I do not always report on my "observations". At Yuanda, I had noticed that from about the beginning of 2019 until spring 2020 (i.e. before Corona!) little happened: Hardly any press releases, no development of sales, which would have been obvious, and in addition, the website remained unchanged for months, along with job offers for relatively easy-to-fill positions such as assistant to the managing director.

Aitme was proof of concept

With all the supposed problems that have long existed in 2020 (Corona at that!) Yuanda managed to win the "Beauty Contest" at Aitme. Aitme, funded by big-name investors, has developed a cooking box that features two "Yu"(link). The decision for the "Yu" was an award for Yuanda, even more so where at Aitme with Til Reuter the former Kuka CEO is one of the investors. He in particular should have taken a close look at the related Cobot, as it is of high strategic importance for Aitme's success. Knowing the financial framework, I had wondered at the time. By the way, for the verification of such decisions as well as for investment decisions I offer a due diligence robotics - with little time investment the environment incl. market/ available figures is analyzed. - In the meantime, Aitme has received 12 million US $.

High development costs

The balance sheet now available for 2020 suggests that money was exceedingly tight at the end of 2020. This would explain the aforementioned standstill. Since the foundation, losses of 5.2 million€ had been incurred by the end of 2020, which should be supplemented mentally by the capitalization of intangible assets (developments) in the amount of 8.8 million€. This means that within 3 1/2 years, including inventories, etc., around €16 million had to be financed. I think it could have been done cheaper. A previous article about the development costs of Cobots I will probably detail soon. However, Yuanda also uses a camera and has developed software for it. In this respect, this explains a certain additional expense.

2020 was probably also the year of disappointed hope for Yuanda. At the beginning of 2020, the successful A+ financing round was announced - apparently prematurely. According to the link , €20 million was raised. But this never came, as both the 2020 balance sheet and the shareholder list, unchanged since 2018, show. At that time, as mentioned, I was struck by the discrepancy between supposed cash inflow and static behavior.

What happened in 2020?

The German shareholders of Yuanda sold their successful automation company forward ttc GmbH in the summer of 2020. This has since specialized in medical robotics under the new name avateramedical Digital Solutions GmbH. Two of the three Yuanda founders have subsequently left Yuanda. It can only be speculated whether they invested the proceeds of the sale in Yuanda. In any case, there was a subsequent increase in personnel to 75 employees at last count (source Finance magazine) and clearly visible marketing activities. The assumed few robot sales in Germany cannot have supported the monthly fixed costs in the clear six-figure range. It is not known whether there were significantly higher sales in China and if so, whether money flowed to Germany. I have a detailed overview of the market shares of cobot manufacturers in China - Yuanda is not included in this. The capital requirements until the end of 2020 can be understood (see above). In 2021, more than €5 million will probably have been needed again.

How can it continue?

Since all significant liabilities are likely to affect the shareholders (i.e. hardly any banks/suppliers - engines come from Kollmorgen), the shareholders are likely to be the primary creditors. The task of the insolvency administrator is typically to achieve the maximum for the creditors. However, the majority of the creditors are (assumed) the shareholders. They must agree to a liquidation. Nevertheless, if they are prepared to do so, a sale of at least the patents would be conceivable. Perhaps a continuation is also feasible. This was the case with Rethink Robotics. Purely speculative: Since the insolvency did not come as a surprise to those involved, they had time to search. For little money, they could offer a potential investor a well-established team with a finished product including patents. Perhaps the future does not lie in the mass market, but in medical technology.
The insolvency portal praises the company and product in the highest terms(link).

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The author of this blog is significantly involved in the AI/robotics project Opdra. He advises robotics companies and investors on market analysis and funding/subsidies. More about him can be found here.