【Epoch Times, February 13, 2025】A prominent Chinese “unicorn” company, Zoom Technologies, was hit by a scandal two days ago. According to reports, CEO Tang Rui is abroad, and senior executives have rapidly submitted their resignations to each other before the Chinese New Year. When employees returned after the holidays, they found themselves unpaid and their office premises sealed. So far, there has been no official response to the incident, while Shanghai Municipal Party Secretary Chen Jining had previously shown support for the company, stirring attention.
Zoom Technologies, well-known in the domestic autonomous driving field since its inception with automated parking technology, completed rounds of financing from 2015 to 2023 (Series A to E) with a total financing of over 2.2 billion Yuan, with a valuation exceeding 9 billion Yuan. The company was backed by investors like Xiaomi, Qualcomm Ventures, Lenovo Holdings, and Junsheng Capital, presenting itself as a unicorn in China’s Advanced Driver Assistance Systems (ADAS) industry.
A unicorn company refers to startups with a valuation exceeding $1 billion.
Earlier, Epoch Times reported on February 11th that Zoom Technologies was facing closure. Employees allegedly received notices to process their resignations within a limited time, and the company premises had their power cut off and sealed. The company’s head, Tang Rui, could not be reached.
Tencent’s C Dimension published an article on the 12th, reporting that the company, referred to as “normally dead” in smart driving, had an insider claiming that Tang Rui had “escaped” to the United States. However, from checking his WeChat account, the IP address indicated Japan based on the content he posted on New Year’s Eve.
A comment by a netizen following this article was quickly deleted. The netizen sarcastically said, “Here’s a joke – Chen Jining praised this company during an investigation in June, and now they’re not even paying salaries.”
On the day the Zoom Technologies scandal broke out, searches related to Shanghai Municipal Party Secretary’s inspection of the company were trending on Douyin.
Tang Rui, the founder of Zoom Technologies, is from Ankang, Shaanxi, and currently holds American citizenship. Born in 1976, he obtained his undergraduate and master’s degrees from Tsinghua University. After graduating, he joined Microtune in Silicon Valley in 2000, followed by roles at U.S. semiconductor companies SiRF and British semiconductor company CSR (now acquired by Qualcomm) in the automotive business group. He founded Zoom Technologies in Shanghai in January 2013.
Xi Jinping, the leader of the Chinese Communist Party, is also from Shaanxi and has had a career path through Shanghai. Among the top CCP officials, both Premier Li Keqiang and Vice President Han Zheng have governed Shanghai. The current Shanghai Municipal Party Secretary Chen Jining is considered one of Xi’s confidants.
The nature of Tang Rui’s relationship with these high-ranking officials is unclear. However, ever since Xi Jinping spoke about unicorn companies last year, Shanghai officials and CCP Central Television had been closely monitoring Zoom Technologies.
On May 23, 2024, Xi Jinping held a dialogue with entrepreneurs in Jinan, Shandong. According to official media reports, after listening to entrepreneurs’ speeches on innovation and investment, Xi posed the question, “What is the main reason for the decrease in new unicorns?” This statement by Xi was later turned into a joke among netizens. However, official media did not mention how entrepreneurs responded at the meeting.
A report from The Wall Street Journal at the time mocked Xi Jinping for asking a question about “unicorns”which left entrepreneurs scratching their heads. Xi intended to boost morale for struggling private enterprises, but it backfired.
Following Xi Jinping’s question about unicorn companies, on the morning of June 12, 2024, Shanghai Municipal Party Secretary Chen Jining visited Zoom Technologies in Shanghai. Chen stated that autonomous driving is a key element in the development of intelligent connected vehicles and faces significant opportunities. Photos posted on the official website of Zhangjiang Science City in Shanghai showed Tang Rui introducing the company to Chen Jining.
On June 26, 2024, in line with Xi Jinping’s remarks, CCTV made a special report titled “Allowing ‘unicorns’ to flourish with patience and capital support.” The report featured interviews with unicorn entrepreneurs in the autonomous driving sector in Shanghai, including Zoom Technologies’ founder, Tang Rui.
At that time, Tang Rui said, “I believe we are on the eve of mass adoption of autonomous driving. When this mode takes off, can we better respect and protect the intellectual property generated in the process from zero to one, and create something different through more innovation.”
However, just a few months later, this CCP-promoted smart driving unicorn company’s boss went missing, leaving the company deserted.
Analyzing by China Business Network, under the dual drive of official policies and the market, the domestic autonomous driving industry in China has seen rapid development in recent years. Apart from Zoom Technologies, several autonomous driving unicorns in China have sought to enter the capital market. Since 2024, a number of domestic autonomous driving companies have gone public. For instance, RoboSense went public on the Hong Kong stock exchange in January 2024. In August 2024, Black Sesame Intelligence successfully listed on the Hong Kong Stock Exchange. On October 24th, domestic intelligent driving solution provider Horizon debuted on the Hong Kong Stock Exchange. However, behind the rush to go public, autonomous driving companies face profitability challenges.
An industry insider stated that the autonomous driving industry consumes enormous capital. In China, after nearly a decade of sustained hype, substantial capital investment and promotion have led to an immature and unhealthy industry chain, resulting in a vicious cycle.
Current Affairs Commentator Li Lin told Epoch Times that Xi Jinping’s emphasis on Party-managed technology often leads to hasty projects without scientific research and planning, causing wasteful expenditure in cut-throat competition and setbacks in various areas such as chips, new energy vehicles, and more. Along with the CCP’s “state advances, private retreat” policy, private enterprises have consistently been at a financing disadvantage, leading to the collapse of these companies. Zoom Technologies collapsed just six months after being praised by the Shanghai Party Secretary and CCTV, which is indeed ironic.
Several Chinese media outlets reported that, due to various operational reasons, Zoom Technologies failed to go public three times. Continuous losses in operation led to a continuous deterioration of the company’s cash flow. Faced with challenges in primary market financing, delays in listing, and pressure to fast-track new company operations, Zoom Technologies found itself in a dead end.
With shrinking core business operations, Zoom Technologies began developing robot business in 2024. In January that year, Zoom Technologies’ new subsidiary, Cancong Robotics, was officially launched, introducing the automated driving charging robot – FlashBot. In December of the same year, Shanghai Zoom Robotics Technology Co., Ltd. was established. The massive investment in Cancong Robotics accelerated the company’s cash flow bleeding. Starting from November 2024, Zoom Technologies faced issues like unpaid salaries and discontinued social security payments.
Blogger “Xiaoheiyedejing” posted on Weibo on February 12th, pointing out that the experience of Zoom Technologies serves as a wake-up call. If people notice a company in long-term losses, it’s best to be vigilant and not wait until a scandal erupts to realize the warning signs. For example, Zoom Technologies had hints of trouble well in advance. From 2021 to 2023, Zoom Technologies’ net losses were 434 million Yuan, 588 million Yuan, and 564 million Yuan respectively, accumulating nearly 1.6 billion Yuan in losses. For a company with a 12-year history, such losses are abnormal. If some employees had recognized the danger earlier, the troubles could have likely been avoided.
Netizens commented:
“But ordinary people can’t distinguish, companies can endure losses for years, and companies like BeiGene and Horizon Robotics have been losing money for over a decade and booming.”
“They almost made it to the Sci-Tech Board, showing how much garbage is there.”
“The new energy industry has developed to a point where some companies have to start exiting.”
“When disaster strikes, everyone flies on their own.”
“It seems that this industry is still in a high-risk state.”