Morningside-backed XYZ Robotics closes nearly $20 million Series A+ round | Light Moments

XYZ Robotics, a technology company focused on robotic hand-eye coordination applications, has officially announced the completion of its Series A+ funding round, raising nearly $20 million. The round was led by Source Code Capital, with 5Y Capital and Gaorong Capital making additional investments beyond their pro-rata rights. Lighthouse Capital served as the exclusive financial advisor for this round.

5Y Capital led the company's Series A round in 2019 and continues to support XYZ Robotics in this latest financing.

XYZ Robotics CEO

Jiaji Zhou

Q1: What was your original motivation for starting this company?

Jiaji Zhou: We want to dramatically raise the ceiling — both technically and commercially — for robotic dexterous manipulation, or hand-eye coordination.

Q2: What industry conventions is XYZ Robotics breaking?

Jiaji Zhou: In the near term, XYZ Robotics is using its software and hardware capabilities to deliver unprecedented hand-eye coordination processes and user experiences to the industry. In logistics, for example, the industry previously believed that grasping various small items it had never encountered before was impossible. By combining cutting-edge deep learning algorithms, 3D geometric vision algorithms, and our patented quick-change hardware, we've achieved fully automated sorting for certain category warehouses — with ROI that actually makes sense for customers. At the same time, we're extending our product line into industrial scenarios, unlocking many applications that were previously unworkable or prohibitively expensive. All of this centers on empowering robotic hand-eye coordination as a standardized process that can be rapidly replicated.

Q3: Why did you choose to take investment from 5Y Capital?

Jiaji Zhou: Shared vision. 5Y has deep, independent thinking about the industry, and makes sound strategic choices through active dialogue with founders. Another critical factor: when the company or team faces potential issues, 5Y cuts straight to the heart of the problem. That's invaluable for a founder. While market feedback on the product is the best evaluation system for a CEO, it's also delayed. Being able to alert entrepreneurs early — especially fresh-out-of-school founders — at the first sign of trouble is crucial.

5Y Capital Vice President

Peter

Q1: 5Y Capital led XYZ Robotics' Series A last year, and we're increasing our stake significantly in this new round. What's your investment thesis?

Peter: Starting in 2015, 5Y made a series of investments in autonomous driving startups that have since become leaders in the field. At the time, we internally viewed autonomous driving as AI's first truly massive-scale application.

Around 2018, we began systematically thinking about where AI's next super opportunity would emerge. Compared to autonomous driving, which solves the "legs" or mobility problem, I believe the "hands" — environmental manipulation — represent a more fundamental robotic capability and an equally massive domain where AI could drive transformation. With rapid advances in 3D cameras, deep learning recognition, point cloud processing algorithms, and edge computing, a wave of startups emerged in the market.

XYZ Robotics, a team that won the Amazon Robotics Challenge three times, places particular emphasis on hand-eye coordination technology and focuses on solving the hardest and most general problems in robotic picking. This aligned perfectly with our vision of finding AI's next super scenario and building foundational capabilities.

Since our investment last year, we've seen rapid progress in the company's productization and commercialization. More importantly, we've witnessed CEO Jiaji Zhou's transformation in just two years from a green PhD fresh out of school into a CEO with technical vision, strategic thinking, and organizational capabilities. This evolution is the most important factor driving our significant increase in this round, and we look forward to realizing the shared vision we established with the company step by step.

XYZ Robotics was co-founded by CMU Robotics PhD Jiaji Zhou, MIT EECS PhD Guanting Yu, and Peking University master's graduate Liangbo Xing. It is the only team in the world to have placed in the top three of the Amazon Robotics Challenge for three consecutive years.

In the logistics industry, grasping unregistered items of varying shapes and colors represents the greatest challenge for automated picking. XYZ Robotics achieves fully automated sorting in category warehouses by combining leading deep learning, 3D geometric vision, optimal motion planning algorithms, and a globally patented quick-change gripper system. Its products lead across all key performance indicators — picking speed, SKU coverage, human intervention rates, and more. The company reduces reliance on hardware performance through advanced algorithms, delivering high-cost-performance products and solutions. In a recent deployment for a top domestic logistics client's warehouse picking workstation, the system was installed 13 days before peak season, achieved stable operation on peak day itself, with 99.9% accuracy and a two-year payback period.

XYZ Robotics putwall station in operation

Beyond continuing to deepen its product and market advantages in logistics applications, XYZ Robotics has demonstrated rapid scenario migration and expansion capabilities built on accumulated technical expertise. Having digested and understood standardized processes in production line and logistics scenarios, the company is using its unique software and hardware capabilities to deliver entirely new processes and user experiences to the industry, unlocking applications previously considered unworkable or prohibitively expensive — such as mixed-case palletizing with uncontrollable inbound carton sequences and high-speed industrial production line kitting.

XYZ Robotics application in mixed-case palletizing

Leveraging its three core technical capabilities — vision, path planning, and end-effector grippers — XYZ Robotics has developed standardized scenarios and simplified deployment as its core product strengths. Across its three main product lines — small-item sorting in logistics, mixed-case palletizing and depalletizing for large items, and industrial loading/unloading and kitting — the company is showing rapid replication momentum and has won broad order recognition from end customers, system integrators, and domestic and international clients.

Regarding this Series A+ round, XYZ Robotics CEO Jiaji Zhou commented: "We thank Source Code Capital, 5Y Capital, and Gaorong Capital for their recognition and support. The company will continue to deeply understand logistics scenarios and production line processes, bringing robotic hand-eye coordination capabilities to more scalable applications faster and better. Every step forward and every achievement at XYZ Robotics is the result of our team's collective effort. We will transform the resources and support from capital markets into an even stronger talent team, using our people and technology advantages to drive product and market advantages, which in turn will reinforce our talent team building."

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5Y Capital is one of China's earliest venture capital firms focused on early-stage investing, currently managing both USD and RMB funds with assets under management totaling several billion dollars. Its limited partners include internationally renowned sovereign wealth funds, family offices, fund-of-funds, and university endowments.

Having worked together for nearly two decades, the 5Y Capital team seeks out, supports, and inspires founders who are willing to go it alone, sharing their exceptional vision and providing our insights, industry experience, and support across all aspects of operations — from the spiritual to the practical.

5Y Capital's successful investments include Sohu (NASDAQ: SOHU), Trip.com Group (NASDAQ: CTRP), The9 (NASDAQ: NCTY), China Distance Education Holdings (NYSE: DL), Focus Media (SZ: 002027), Xunlei (NASDAQ: XNET), Phoenix New Media (NYSE: FENG), UCWeb (Alibaba, NYSE: BABA), JOYY (NASDAQ: YY), Didi Dache (DiDi), Musical.ly (ByteDance), NYSE: ZEPP (NYSE: HMI), OneSmart International Education Group (NYSE: ONE), Huya (NYSE: HUYA), Xiaomi (HK: 0181), Viomi (NASDAQ: VIOT), Kingsoft Office (688111.SH), LIZHI (NASDAQ: LIZI.US), and Agora (NASDAQ: API). The portfolio also includes rapidly growing companies such as Kuaishou, WeDoctor Group, SenseTime, Xpeng Motors, Souche, Horizon Robotics, Bigo, Aihuishou, Xiaozhu, Maimai, Smartmi, Pony.AI, and Keep.