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Clobotics is based in Shanghai and Bellevue, Wash. and is eager to grow it’s Northwest workforce. (Clobotics Photo)

Clobotics, a startup using robotics and artificial intelligence to capture and analyze images for energy and retail companies, has raised $11 million in a Series A round of funding. The two-year-old company, with headquarters in Shanghai and Bellevue, Wash., has raised a total of $21 million and grown to nearly 80 employees.

“We’re very excited to have another round of funding to be closed very quickly,” said CEO George Yan.

The business deploys drones and other robotics to take precise photos for customers. For wind-power companies, a fleet of drones will survey wind turbine blades, snapping photos that look for weather damage that can weaken the blades. The machines send the images back in real-time and Clobotics analyzes the pictures using machine learning to detect problems much faster than a human inspector could. In the retail sector, some major consumer brands use the company’s technology to take images of packaged goods to improve in-store sales.

Yan and his co-founders Claire Chen, Yan Ke and Zhao Li are all former Microsoft executives. With the new infusion of cash, the company is planning to hire more employees, namely those with expertise in AI and working in the greater Seattle area.

Demand is high for AI engineers and the area’s tech giants want them too, making it hard for a startup to compete, said Yan. One of his strategies has been to employ highly-skilled interns from around the globe, giving them a chance to publish papers on their findings. That in turn attracts more talent.

“We’re trying to find innovative ways for us to grow while the market is hot,” Yan said.

He’s predicting that the hiring will get easier as the market cools, which he expects to happen in China in particular. New tech businesses have been popping up, but Yan suspects many won’t go the distance. “We believe the core technology and deep understanding of the customer are lacking at times,” he said.

Clobotics’ main competition on the retail side is Singapore’s Trax Retail, but Yan said his company has an advantage in its use of AI. In wind power, no other business provides the full-suite of services from capturing to quickly analyzing the images.

The new investors include Nantian Infotech Venture Capital, a subsidiary of the China and Silicon Valley-based IPV Capital, and China’s Wangsu Science and Technology Co. Previous funding came from South Korea’s KTB Network, California’s GGV Capital and the Capital Development Investment Fund Management in Beijing. Many of Clobotics’ customers are international companies and the business is eager to expand operations into South East Asia, Europe and South America.

Yan is glad to have made the leap into startups, but doesn’t downplay the stress of being the head of a company.

“It’s the new wild, wild West for me,” he said. “It doesn’t matter how long you have spent in the corporate world and prepared for it, once you jump into the startup world, especially when I am the last line of defense, not Satya Nadella [CEO of his former employer, Microsoft] — it’s exciting and nerve-racking.”

We caught up with Yan for this Startup Spotlight, a regular GeekWire feature. Continue reading for his answers to our questionnaire.

George Yan, CEO and co-founder of Clobotics. (Clobotics Photo)

Explain what you do so our parents can understand it: We use our hardware in various forms including drones, robots and edge-computing devices to capture industry-specific data and images. We use deep learning to analyze the images and generate data to produce meaningful insights in near real-time for our customers.

Inspiration hit us when: We saw customers in traditional industries such as wind power and retail struggling with copious amounts of repetitive work that involves huge amounts of manpower. We believe there is an easier way to accomplish these tasks and increase productivity exponentially by using AI technologies. We are passionate about helping traditional businesses achieve more by using innovations in the cloud, robotics and data analytics.

VC, Angel or Bootstrap: We have used all three at different stages. At day zero, Clobotics was bootstrapped as we wanted to move fast and try different paths. We also believed that it was important for us to put money where our mouth is. Investing our own money was a way for us to ensure that we were making the best decisions from the start. Once we had our prototype, we took on a couple of angel investors to help provide us insight into different aspects of running a company such as legal and finance, and to gain a better understanding of the venture capital world. When we landed our first customer, we tapped into one of the best cross-border venture capital firms in the world, California’s GGV Capital. Jenny Lee, a managing partner at GGV, believed in our vision and the company became our first institutional investor. Lee also joined our board.

Our ‘secret sauce’ is: Our founders are a bit older than the usual AI startups. We are all experts in our own realms — whether it’s cloud, computer vision, large-scale operations or sales. Each of Clobotics’ founders average more than 18 years in the sector, so we’ve experienced the dot-com bubble bust, the housing crisis and China’s internet boom. Because of this, we are much better equipped to see through the latest hype and identify what’s real. In the commercial space, a combination of our long-standing business experience and deep technical know-how are rare. Not only do we have it, we’ve partnered with each other for a very long time.

In May, Clobotics won second place in the Startup World Cup 2018 in the China Regional. The event is organized by Fenox Venture Capital.

The smartest move we’ve made so far: We took our time to figure out which sectors we wanted to enter and pivoted as needed. Also, we decided to go deeper into each of the verticals while serving the market leader in the specific industry. This allowed us to have a deeper understanding of the pain points in the industries and gain huge credibility in that particular customer base.

The biggest mistake we’ve made so far: We spent a bit more time than we needed on calculating our valuation and explaining that to potential investors in the early rounds of funding. Lee, in her role as board member, was instrumental in explaining that valuation in the early rounds isn’t as critical as the speed of closing, and that we should use that energy to improve our product and work with customers.

Which leading entrepreneur or executive would you most want working in your corner? Reed Hastings, the co-founder, chairman and CEO of Netflix. Hastings has successfully created a culture that inspires creativity, brings the best out of people and had the courage to cut out the non-actionable items from the usual HR handbook. We believe culture is the cornerstone of any sustainable business and having the opportunity to learn directly from Hastings and understanding his thought process would be extremely valuable.

Our favorite team-building activity is: We’re all big foodies, so our favorite activity is trying out new restaurants together.

The biggest thing we look for when hiring is: Whether someone is a cultural fit for Clobotics. We also ask ourselves, does the person seem like a “Clobotiator” — our version of a gladiator. We believe that we can coach someone to develop technical depth or business acumen. But finding someone who is curious about everything we do, who can think deeply on a problem and not be afraid to get his or her hands dirty, that’s special! We create interview scenarios to reveal these traits.

What’s the one piece of advice you’d give to other entrepreneurs just starting out: Take a deep breath and ask yourself, are you really ready to do a startup? Don’t get coerced into doing it because it’s fashionable. Many founders whom we’ve talked to say they wished that they’d spent more time in a corporate environment to better hone their technical skills, answer more calls of duty, make mistakes on someone else’s dime, and still been able to redeem themselves and move up the ranks. These are all basic tools that one needs to survive in the startup world.

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