Embodied AI Fuels Record Robotics Funding In China As IPO Momentum Builds

1966woodenghost May 20, 2026 0

Venture investment in China’s robotics sector has hit an all-time high this year, Crunchbase data shows, as several well-funded startups in the space make IPO debuts.

Just through mid-May, China-based robotics companies this year have raised $5.6 billion across 176 deals, Crunchbase data shows. That sum matches total investment to the nation’s robotics companies in all of 2021, the peak of the funding cycle. Investment in the sector has also already eclipsed the $4.3 billion raised by China-based robotics companies in all of 2025.

Startup funding in Asia overall surged to $27.4 billion in Q1, its highest level in over three years, with China capturing $16.5 billion — 60% — of that total, according to recent Crunchbase data. Robotics contributed meaningfully to that $16.5 billion total, with startups in the sector raising $3.3 billion across 126 deals.

Embodied AI boom

A review of Crunchbase data shows that investors now are no longer funding mostly pre-programmed hardware, but increasingly backing China-based startups working on embodied AI — or artificial intelligence with a physical body that interacts with the real world in real time.

That shift toward artificial intelligence-driven robotics mirrors a global surge in investment into robotics and other physical AI startups. It’s also thanks to the rise of advanced, open-source reasoning models that have fundamentally changed how robots operate. Startups are moving away from coding robots line-by-line toward Vision-Language-Action models that allow physical machines to observe, reason and execute physical tasks end-to-end.

In China, robotics startups at the intersection of the software and hardware integration are drawing the largest checks in the space and often back-to-back funding rounds. They include:

TARS Robotics, a 1-year-old humanoid robotics company that integrates embodied intelligence that last month raised a massive $513 million seed round led by Hillhouse Capital and HSG. The Shanghai-based company was valued at $1.9 billion.
X Square, which develops robotic systems and automation solutions for industrial and service applications, closed a $140 million Series A extension round in January from investors including ByteDance. Then just three months later, it raised $293 million in a massive Series B round co-led by Xiaomi Corp. and HSG
In February, Beijing-based Spirit AI, which says it’s building a “universal brain” for robots, raised a $290 million Series A led by Chaos Investment and YF Capital. The 2-year-old company was valued at $1.5 billion. Then in April, it announced a $145 million Series A extension financing, bringing the total round to $435 million.
Humanoid robotics company Galaxea AI in February raised a $145 million Series B led by Jinding Capital. The 2-year-old China-based company was valued at $1.4 billion. In April, it announced a $290 million extension to that round, bringing its total to $435 million
Shenzhen-based EngineAI, a builder of humanoid and quadruped robots, raised a $200 million Series B last month led by Henan CICC Huirong Fund Management and Luxshare-ICT. The 2-year-old company’s robots will be deployed for traffic, security and retail. It was valued at $1.5 billion.

Top investors

Crunchbase data shows the most active investors in the space are largely Asia-based. The busiest this year has been Hong Kong-based HSG, taking part in six deals, including a $200 million round last month for humanoid robotics and embodied intelligence developer Robot Era.

Among lead or co-lead investors, three China-based firms — Xuhui Venture Capital, YF Capital and Chaos Investment — have each taken part this year in deals totaling $290 million or more.

Exits gain steam

Venture investors are likely feeling confident as the sector notches notable liquidity events, including IPOs and acquisitions.

The highly anticipated public listing of Unitree Robotics, targeting a $3 billion to $7 billion valuation, is a milestone for the industry. The company in March filed for an initial public offering to list on the Shanghai Stock Exchange, and its IPO would likely spur other startups in the space to pursue their own public-market debuts.

The sector has already seen some notable exits.

They include Hong Kong-based Robotphoenix, a Shanghai-based startup that makes lightweight industrial robots. The company on May 18 listed on the HKEX, raising about $86 million. And it did not disappoint. Robotphoenix closed its first full day of trading at HK$53.75 ($6.86 U.S.), up nearly 80%. (Interestingly, Chinese robotics firms are increasingly using Hong Kong as their primary liquidity hub.)

On the M&A front, in what is widely considered a historic first for China’s embodied artificial intelligence sector, AI robotics unicorn AgiBot in July 2025 engineered a two-stage consortium takeover to acquire a 63.62% controlling stake in legacy manufacturer Swancor Advanced Materials for about $290 million. AgiBot’s co-founder formally stepped in to chair Swancor, effectively turning the publicly traded shell into a direct extension of AgiBot.

Ultimately, it seems that 2026 is the year China’s robotics companies are pivoting from raising early venture rounds to mass production, as a domestic market that currently accounts for more than 43% of global robotics venture investment, per Crunchbase.