Roborock, an intelligent home-cleaning robot company, disclosed a shareholding reduction announcement on Thursday night. Holding 8.87% of shares, Shunwei Ventures III (Hong Kong) Limited intends to reduce its shares to a total of no more than 4,008,378 shares, and the number of shares to be reduced reportedly accounts for no more than 6.00% of the total share capital of the company.
Roborock was established in July 2014, with Shunwei Capital, founded by Lei Jun (the co-founder and chairman of Xiaomi) and Tuck Lye KOH, serving as an early investor. As a “Xiaomi ecological chain” enterprise, Roborock grew its business with the support of Xiaomi in the early stages following its establishment. After being listed on Shanghai’s STAR market, it enjoyed market success. In 2021, its share price once exceeded 1,400 yuan ($208). However, since 2021, Xiaomi has continuously reduced its shareholdings in the company, also reducing its cooperation between the two companies.
According to a prospectus of Roborock, in March 2016, the firm made an equity transfer, and Hi-P International, a shareholder of the company, transferred part of its equity to Gaorong Capital, Qiming Venture Partners, Shunwei Capital and other institutions. Among them, Shunwei Capital obtained about 0.3% of the shares at a consideration of 3.52 million yuan ($522,767), and the valuation of Roborock after investment was 1.184 billion yuan.
In April 2016, Roborock completed a fresh round of financing, with Shunwei Capital investing 10.9 million yuan. The post-investment valuation of Roborock was 1.482 billion yuan. In March 2019, Shunwei Capital increased its investment again. Before the company went public, Shunwei Capital held 12.85% of the company’s shares.
After the listing of Roborock, Shunwei Capital took the lead in reducing 500,000 shares from March 16 to April 14, 2021, accounting for 0.75% of its total share capital. Its shareholding ratio in Roborock dropped to 8.87%.
If the number of shares reduced this time reaches the maximum planned number, the proportion of shares held by Shunwei Capital will drop sharply. It may even withdraw from the top five shareholders.
In the past year, Roborock’s share price has dropped by more than 50%. The sharp reduction plan of its early stage important shareholders may bring further pressure to the company’s stock price.