The once highly valued mainland Chinese unicorn startup in the field of intelligent driving, Zongmu Technology, with an estimated value of up to 9 billion RMB, has been reported to have collapsed. Employees have received notices to process their resignation proofs within a limited time, with the company’s location facing power outage and closure. The company’s founder, Tang Rui, has gone missing, with rumors suggesting he has fled to the United States. Analysts suggest that funding from investors like Xiaomi may have gone down the drain.
Headquartered in Shanghai, the news of Zongmu Technology, a prominent smart driving company, has sent shockwaves through the industry. An internal notice issued by the company stated: “Starting from 6:00 pm on February 8th, power will be cut off, and the building will be sealed. Employees can enter the building with security escorts to retrieve personal belongings.”
Reports from various mainland Chinese media outlets such as 21st Century Economic Report, China Business Journal, and Economic Observer on February 11th revealed that the well-known mainland Chinese automotive intelligent driving company, Zongmu Technology, is now caught in a deep operational crisis.
It has been reported that Zongmu Technology has been embroiled in wage arrears and collapse rumors since the end of last year. On November 10th last year, the company announced a delay in salary payments to the 25th of each month. On November 25th, an internal all-staff meeting was held by Zongmu Technology’s management, acknowledging the current challenges. In the evening of that day, the company announced in an all-staff email that Zongmu Technology was entering a “wage arrears mode.”
However, the company continued to claim externally, “First ensure production, there will be funds coming in by the end of 2024.”
On January 23, 2025, Zongmu Technology held another all-staff offline meeting, where CEO Tang Rui informed all employees that financing would be received before the Chinese New Year to pay off all arrears. But on the evening of January 26th, Zongmu Technology granted all employees a holiday for the Chinese New Year without paying their salaries.
An employee told 21st Century Economic Report that on January 26th, a small group of 8 employees within Zongmu Technology (including legal, financial, and HR executives) collectively transferred the funds allocated for the speedy maintenance of the robot during the New Year period into their personal bank accounts. This group conducted bank transfers continuously from the afternoon of January 26th until 5 am on January 27th. After January 27th, executives holding the company seal collectively resigned and mutually approved the process.
On February 5th, employees returning from the holiday at Zongmu Technology did not receive their salaries, with CEO Tang Rui even ignoring messages in the company chat group. A staff member mentioned that due to reasons such as Tang Rui being abroad, the entire management leaving, the company was stranded after the New Year, preventing all remaining employees from processing resignations and social security matters normally.
The reporter from DianDongZhi Home tried several times to call Tang Rui’s phone, but it remained switched off. An employee also claimed, “All the company executives have resigned, and the CEO has now gone abroad.” “He went to the United States.”
Established in 2013, Zongmu Technology (Shanghai) Limited was founded by Tang Rui, a Tsinghua University electronic engineering master with 20 years of Silicon Valley automotive electronics research background. Tang Rui, currently 48 years old, holds American citizenship. The company started with automated parking and touted itself as a technology enterprise focused on autonomous driving (AD) and advanced driver assistance systems (ADAS).
Zongmu Technology was once a star company in the smart driving field. Between 2015 and 2023, Zongmu Technology completed financing rounds from Series A to E, with a total financing amount exceeding 2.2 billion RMB and a valuation exceeding 9 billion RMB. With backing from investors like Xiaomi, Qualcomm Ventures, Lenovo Holdings, Junlian Capital, and local state-owned entities in Chongqing and Shanghai, it became a unicorn in the Chinese ADAS (Advanced Driver Assistance Systems) race.
In June 2013, the company released the industry’s first integrated navigation car machine and panoramic host solution. In October 2014, Zongmu Technology introduced the most comprehensive industry version of the Surround View ADAS system solution.
However, due to various operational reasons, Zongmu Technology failed to go public three times.
In January 2017, Zongmu Technology was listed on the New Third Board but was delisted within a year. The same year, the company completed Series B financing and released the industry’s first low-cost, high-performance, mass-producible self-parking AVP1.0 system. In June 2018, Zongmu Technology announced a strategic cooperation with Velodyne, advancing L3 and above autonomous driving solutions. In March 2022, Zongmu Technology completed over 1 billion RMB in Series E financing. In 2022, Zongmu Technology aimed for the Science and Technology Innovation Board (STAR Market), but withdrew its IPO application in September 2023. In March 2024, Zongmu Technology submitted a listing prospectus to the Hong Kong Stock Exchange, but failed to pass the hearing, leading to the expiration of the listing application in September.
In January 2024, Zongmu Technology announced the establishment of a new subsidiary, Silk Road Robots, and launched a new product – the low-speed fully automatic driving charging robot FlashBot. Tang Rui publicly stated that before the large-scale commercialization of autonomous valet parking, this product would be the best in achieving commercialization of autonomous valet parking in closed parks.
The extensive investment in Silk Road Robots accelerated the outflow of cash, which might have been the key factor that crushed Zongmu Technology.
Starting from November 2024, Zongmu Technology encountered issues with wage arrears and social insurance discontinuation. Currently, the company owes wages to over 700 employees, and social insurance and provident funds have not been paid. Even the minimum wage for December 2024 has not been paid, leading some employees to resort to filing for labor arbitration.
An article published by Phoenix Net highlighted that as of the last issuance date of the IPO prospectus, Tang Rui, along with his concerted action person (Tang Rui’s mother Li Xiaoling), collectively controlled 33.30% of the voting rights of Zongmu Technology. Tang Rui holds approximately 25% of the shares, with Li Xiaoling holding 7.91%. Looking at investors before going public, Dongyang City State-owned Assets Company’s Dongyang Gongding holds 6.48%, the sole partner being Caitong Capital under Caitong Securities; the Lenovo Group collectively holds nearly 10%, with Lenovo Holdings holding 1.2% and Junlian Capital holding 8.74%; Co-Innovation held 7.96%, with Junlian Capital holding 7.55% through Junlian Venture and Xiuyue Investment at 1.19%; Lenovo Holdings holds 1.20% through Lenovo Pioneer Frontier, and Co-Innovation holds 7.96% through Co-Innovation Long Prosperity and Co-Innovation holding 4.27% and 3.69%, respectively; Qualcomm holds 2.6%, and Xiaomi Industry Fund holds 4.73%.
The article indicates that the 22 billion RMB investment from these investors might have gone down the drain, with Xiaomi transferring approximately 151 million RMB in 2021 and investing another 60 million RMB, totaling about 210 million RMB.