Shanghai-based autonomous driving startup ZongMu Technology said on Monday that it had completed its $14.5 million follow-on Series C investment.
Qualcomm Ventures led the round with participation from Legend Capital, the venture capital arm of Lenovo Group, and Chuangtu Investment.
Although the Trump government had ordered Qualcomm to stop selling sensitive technology to Chinese companies, this did not prevent the US chip manufacturer from investing in the Chinese startup. Given that 61% of Qualcomm's revenues come from the Chinese market, it is essential for the company to have an open mind on Chinese startups.
The follow-on investment comes a year after ZongMu's last round. In June last year, it completed its $30 million Series C funding from investors such as Legend Capital and Xiamen C&D Company. Legend Capital was also involved in the company's Series B fundraising in February 2017.
Proceeds this time will be used to develop a full production line from an advanced driving-assistance system (ADAS) to an autonomous driving system. ZongMu also plans to develop its overseas market in parallel with the Chinese market.
ZongMu mainly provides algorithms for autonomous driving. A partnership with Qualcomm will enhance its computing capabilities and will provide low-cost chips for its autonomous driving solutions.
Autonomous driving remains a hot theme for auto tech investment. It took more than 70% of the roughly $5 billion invested in auto tech startups as of September 2018, according to third-party research firm CB Insights.
Huge investment in the field has also created fierce competition between autonomous startups. There are already a dozen Chinese companies working on similar businesses; providing algorithms for car makers to install in their vehicles.
ZongMu reckons that the way to lead the market is to produce low-cost products with Qualcomm. The startup intends to mass produce its autonomous parking solution system next year. It also intends to cooperate with international car manufacturers on the development of ADAS.
“ZongMu has become a leader for ADAS solutions in China,” Qualcomm vice president James Shen said. “We are happy to participate in this investment and would like to make progress on driving in the 5G era.”