Chinese IoT cloud platform Tuya Smart has announced three partnerships this month with leading smart device makers in the Ukraine, US and Turkey. In February, Tuya also filed for an IPO on the NYSE targeting to raise at least $100m. If approved, the startup will be the world’s first company of its kind that goes public.
On March 5, Tuya announced cooperation agreements with Tervix, a major smart home provider in the Ukraine that sells 50 SKUs of smart devices through its 100 distributors in the country, and Noonlight, the US-based connected safety platform that enables 24/7 professional sensor and video monitoring and data-rich emergency response. A week later, on March 12, Tuya announced another tie-up, this time with LEDOLET, Turkey’s first LED bulb producer, for the development of intelligient lighting products.
Launched in 2014, Tuya provides an IoT cloud platform with a full suite of PaaS and SaaS offerings to developers and businesses looking for connectivity solutions. By the end of 2020, it had enabled over 204m smart devices and 252,000 SKUs across hundreds of categories, serving over 262,000 developers as well as 2,700 brands globally, including Philips and Schneider Electric.
Before filing for the IPO, Tuya had secured four rounds of funding, including a $200m Series C raised in 2018 from US global VC firm New Enterprise Associates (NEA), the Australian sovereign wealth fund Future Fund, CICC Silicon Valley Fund, Broadband Capital, Quadrille Capital and C.M.Capital. Tech giant Tencent is also a shareholder of Tuya, second only to NEA, with a 10.8% stake, according to Tuya’s prospectus.
In 2020, its annual revenue rose by 70% to $180m from 2019 but it posted net losses of $70.1m and $66.9m in 2019 and 2020 respectively.
Reduced R&D time
When creating a smart, interconnected device, developers integrate Tuya’s modules into existing products by writing just a few lines of code or sometimes non at all, significantly reducing the R&D effort required through online function editing, device access, testing and production scheduling. The whole R&D process can be shortened from one year to one day, according to a media report. Developers can create an app dashboard, which can integrate the control of all “Powered by Tuya” products within minutes, finalize a prototype in six hours and start mass production within 15 days.
The whole R&D process can be shortened from one year to one day
Tuya’s ability to provide one-stop PaaS and SaaS to businesses globally via its platform can be attributed to the partnerships the startup has established with leading global players in various industries. It has cooperated with Amazon to create a more secure and reliable cloud service platform. Its partnership with Microsoft in 2019 brought its platform to Azure Cloud. Its IoT cloud platform now handles over 84bn requests and 122m voice interactions per day, with an average response time shorter than 10ms.
The company has also been able to help its clients bring the cost of creating a smart device down to one seventh of the market average. Nearly all its partner manufacturers have achieved a ten-fold business growth after partnering with Tuya. Since its establishment, Tuya has also brought its IoT cloud services to real estate and retail sectors.
"We want to empower more industries where AI and IoT applications are still in a nascent stage," CEO Jerry Wang said. “There will be a new round of further upgrade of AI and IoT technologies and user experience, which will drive us to make continuous innovation in computer vision, NLP, big data, cloud computing, embedded hardware and chips.”
Since Tuya was established, it has made its goal very clear – to build gateways to connect smart devices. “To achieve that goal, we have to develop the platform capabilities first and build an IoT operating system,” Wang said at the company’s annual conference and 5th anniversary in 2019.
Tuya is not the first venture started by its founders Wang and Leo Chen. In 2003, while still studying at Zhejiang Sci-Tech University, the pair co-founded the open source forum PHPWind, which was acquired by Alibaba for $9m in 2008. After that, they held key positions at Alibaba Cloud, with Wang as the first GM and Chen as the operations director.
When it was founded, the startup was a team of only four people. Today, it has about 2,500 employees globally with offices in the US, Germany, India, Japan, Colombia, and China. The global IoT market is expected to reach a value of almost $1.3bn by 2025 from $690bn in 2019 at a CAGR of 10.53% from 2020–25.
“When Tuya was founded, the [Artificial Intelligence of Things] and smart-device markets were in a nascent stage, and needed to be educated,” recalled Chen, now the company’s Chairman. "Nowadays, nearly all manufacturers, brands, retailers and operators across the whole world are trying to get smart,” he said.
Tuya means “graffiti” in Chinese, and, in English, it refers to a rare and distinctly shaped volcano that “explodes through surfaces, creating new landscapes where there previously was nothing,” Wang explained. “It’s the perfect embodiment of what we wanted to achieve – creating a simple but colorful interconnected world."