How Xiaoyu Technology, Backed by Kai-Fu Lee, Is Transforming Home Care and Telemedicine

In January 2016, VCBeat’s VBInsight published its first article, “An In-Depth Review of Asset-Light Entrepreneurial Models in Elderly Care.” In March, it released “A New Entrepreneurial Track Has Emerged: The Rise of Asset-Light Opportunities in Elderly Care.” Moving forward, we will gradually publish reports on startups operating in niche segments of the asset-light elderly care sector. This is the ninth installment.

“The logo of Xiaoyu Zaijia features a clownfish. In nature, clownfish and sea anemones share a symbiotic relationship, much like the close bond that should exist between each of us and our homes,” Yuan Wenhui, Co-founder and Chairman of Xiaoyuer Technology, told VCBeat. He noted that this brand emblem also embodies Xiaoyuer Technology’s corporate philosophy of “Born for Home.”

In March 2014, Xiaoyuer Technology Co., Ltd. (hereinafter referred to as “Xiaoyuer Technology”) was established in Beijing. As an innovative company dedicated to the research and development of internet hardware and smart home appliances, Xiaoyuer Technology’s products achieved remarkable results within just six months.

Before the Spring Festival of 2015, Xiaoyu Zaijia launched a crowdfunding campaign on JD.com. On June 18, Xiaoyu Zaijia was officially released, followed by the launch of the Xiaoyu Zaijia Lingdong Edition and Xiaoyu Bangong, which targets enterprise-level users. Prominent figures such as Pan Shiyi of SOHO China, Li Kaifu of Innovation Works, and Jiang Nanchun of Focus Media became loyal fans of their products. It was precisely based on Li Kaifu’s endorsement of Xiaoyu Zaijia that Innovation Works led the Series A and Series B funding rounds for Xiaoyuer Technology.

Over the past six months, Xiaoyu’er’s partners have spanned the healthcare, nursing and care, audio-visual, and real estate sectors, including Beijing 301 Hospital, Deheng Clinic, Peking Union Medical College Hospital, Qingsong Nursing and Care, and LeTV. From in-home caregiving and children’s education to medical health, what has driven this company to expand into multiple domains, and what has earned it the favor of Kai-Fu Lee from Innovation Works? In response, VCBeat conducted an exclusive interview with Yuan Wenhui, COO of Xiaoyu’er Technology.

Communication and Healthcare: The Two Major Pain Points at the Inception of Xiao Yu'er

At its inception, Xiaoyuer Technology identified two key pain points to address with its products. The first is communication: for many families, being “away from home” has become the norm, and the “inability to provide companionship” has become a dilemma in maintaining family bonds. So, how can we bridge the distance gap and restore and rebuild familial affection?On this point, Yuan Wenhui shared his personal experience with VCBeat: Twenty years ago, Yuan Wenhui left Guangzhou. Since then, he has basically been able to return home to visit his parents only during the Chinese New Year. His parents, both in their seventies, have long lacked his companionship at home, leaving Yuan Wenhui filled with guilt. Before founding Xiaoyuer, Yuan Wenhui had three dreams: First, he hoped his parents could see him often; second, he wished for his parents to receive medical consultations without leaving home, avoiding the hassle of queuing and registering at hospitals, only to have doctors spend a mere three minutes on each patient; and third, he desired that his daughter could receive remote tutoring from teachers while at home.

“After Xiaoyu Zaijia was launched, Yuan Wenhui’s first two wishes were quickly fulfilled. ‘Now my parents and I meet at least a few times every week. Not only can they see me, but they can also see my younger brother and older sister. Our family spends much more time together than before. In addition to more frequent visits, my parents can now consult with doctors online through Xiaoyu Zaijia. I believe it won’t be long before my last wish comes true as well. So, Xiaoyu Zaijia has truly changed our lives,’ Yuan Wenhui told VCBeat.”

The second pain point lies in healthcare. China is aging before becoming wealthy, with its elderly population exceeding 200 million. Elderly care and health services have become major development directions; many telecommunications, real estate, and insurance companies are promoting elderly care as a key selling point, while some European elderly care institutions have also entered the Chinese market, recognizing the substantial demand in this sector. As a startup, how can Xiaoyuer Technology provide services to these large corporations? This has become its breakthrough point for entering the elderly care industry.

For example, Xiaoyuer Technology’s partner, Beijing Deheng Clinic, is a private high-end comprehensive clinic established in accordance with international standards. Committed to integrating resources across various sectors—including private physicians, comprehensive outpatient services, and online healthcare—the clinic boasts a network of thousands of domestic and international medical experts. It aims to deliver high-quality family medical services as the “gatekeeper of health,” counting many celebrity and ultra-high-net-worth individuals with assets ranging from hundreds of millions to tens of billions among its VIP clientele. Enhancing service efficiency for users and expanding its reach from elite clients to white-collar professionals have long been key objectives. Through its collaboration with Xiaoyuer Technology and the Xiaoyu Zaijia platform, Deheng Clinic has not only diversified its service offerings but also extended its premium services to ordinary white-collar workers, thereby achieving two goals with a single strategy.

There are also real estate developers collaborating with Xiaoyuer Technology. For instance, a residential project under Wenzhou New Hope Group adopted the slogan “A Tripartite Balance” after partnering with Xiaoyuer Technology. In simple terms, this means residents can consult renowned physicians within three seconds without leaving their homes, and access healthcare services without even stepping out of their buildings or residential communities. Through Xiaoyuer’s products, the distance between service providers and consumers has been completely eliminated. Therefore, how to integrate and package such value-added medical services as a unique selling point has been a ongoing consideration for real estate enterprises. The launch of “Xiaoyuer at Home” has effectively addressed this challenge.

For another example, Qingsong Kanghu, a company specializing in telemedicine and in-home care services that was previously reported by VCBeat, is also one of Xiaoyu Zaijia’s partners."Qingsong Kanghu: Building a Closed-Loop 'Care Network' for Elderly Rehabilitation". If nursing staff were dispatched daily to measure blood pressure, body temperature, and heart rate, it would place an excessive burden on Qingsong Kanghu’s human resources and result in low efficiency. After partnering with Xiaoyu Zaijia, Qingsong Kanghu launched the “Qingsong Health+” service. By leveraging Xiaoyu Zaijia’s hardware and software solutions to interconnect with users’ wearable medical devices, Qingsong Kanghu can achieve remote monitoring and guidance, providing features such as timed medication reminders for the elderly, weight tracking, and blood pressure monitoring.

Regarding hospital partnerships, Xiaoyuer Technology has currently established business collaborations with Beijing 301 Hospital, Peking Union Medical College Hospital, and several Grade A tertiary hospitals in Chongqing. In the future, the company will also partner with traditional Chinese medicine hospitals to provide users with more comprehensive medical services by integrating online consultation appointments with offline medical care.

Addressing Two Major Pain Points

“Driven by the demands of various stakeholders, we identified these pain points and developed Xiaoyu Zaijia. We hope this product will bridge the emotional distance between people, enabling those in different locations to regain a sense of belonging provided by family through Xiaoyu Zaijia, so that even when living apart, three generations can still feel as if they are under one roof. Similarly, through vertical collaborations with high-end private hospitals and real estate developments, we help enhance and streamline their services and business processes, allowing the elderly to access professional-grade medical care without leaving their homes,” said Yuan Wenhui.

Xiao Yu'er's "Human-Task Internet"

As the saying goes, “different trades are worlds apart.” To truly excel in developing a product, focus is essential. Xiaoyuer Technology has consistently concentrated on its area of expertise: bridging the distance between people. Yuan Wenhui believes that the core strategy lies in building a “Human-to-Service Internet.” For instance, through Deheng’s medical services, Qingsong’s health and care services, and LeEco’s educational services, users interact with these offerings via the Xiaoyu Home platform, which connects them to various service providers. This enables enterprises to expand their business scope and application scenarios, embodying the true significance of the “Human-to-Service Internet.”It is understood that Xiaoyuer’s current business operations primarily consist of two segments: Xiaoyu At Home, targeting consumers, and Xiaoyu Office, targeting enterprises.Key features of Xiaoyu At Home include family companionship, home-arrival reminders, call forwarding, home video recording, family photo albums, cloud-based secure storage, and Xiaoyu Assistance.

The main features of Xiaoyu Office include: remote dialogue, collaborative office work, meeting discussions, VIP customer service, large-screen casting, and voice conferencing.

Regarding the role that intelligent robots will play in elderly care and rehabilitation in the future, Yuan Wenhui stated, “I have a sincere hope that, in the future, robots can truly assume the responsibilities of monitoring and caring for the elderly. However, based on my current understanding, we are still quite far from achieving this goal in terms of cost, reliability, and technology. At present, no product anywhere in the world has been able to realize this. Google’s AlphaGo is merely a piece of code specifically optimized for playing Go; when applied to real-life scenarios, which are vastly more complex, intelligent robots are unable to cope. Therefore, intelligent robots remain a long way from market-ready applications in the role of elderly care and rehabilitation specialists.”

Regarding product advantages, Yuan Wenhui stated, “At least for now, I can confidently say that Xiaoyu’er’s technology is absolutely leading. We have taken many detours in the R&D and design processes, so I am fully aware of the immense difficulties and pitfalls involved. Since the intelligent robotics market is still in its early stages of rapid growth, Xiaoyu’er does not exclude other companies from entering this space; on the contrary, we hope more capable companies will join us to collectively expand this market.”

Xiao Yu'er's Technical DNA

Prior to its establishment, Xiaoyuer Technology had already assembled a group of like-minded technical experts with ten to twenty years of industry experience. Attracted by these experts, more high-caliber technical talents joined the Xiaoyuer Technology team. This positive accumulation has steadily strengthened Xiaoyuer’s technological DNA. Currently, Xiaoyuer has over 40 patents either applied for or already granted, covering areas such as audio and video technologies, cloud services, and comprehensive solutions.

Xiao Yu'er Team's Three Heroes

Song Chenfeng, Founder and CEO of Xiaoyuer Technology, began his career as a Product Manager at Microsoft Xbox in the United States, where he contributed to the development of products such as Xbox 360, Xbox Live, and Xbox Live Vision. He later served as General Manager and Assistant CTO of the YY Open Platform. He holds a Bachelor’s degree in Computer Science and Computer Engineering from the University of Virginia.

Yuan Wenhui, Co-founder and Chairman of Xiaoyuer Technology, brings 20 years of innovation experience in the high-tech sector and holds five patents in China and the United States. He previously served as Global Vice President and General Manager for China at Polycom, a Silicon Valley-based publicly listed company. He spearheaded the global launch of cloud- and mobile internet-based specialized audio-video solutions, positioning the company ahead of industry competitors. His accolades include the Edison Awards in the United States, among others. Mr. Yuan holds a Bachelor’s degree in Electronic Information from Sun Yat-sen University, a Master’s degree in Telecommunications Engineering from the University of Ottawa in Canada, and an MBA from Queen’s University in Canada.

Co-founder and CTO, Zhao Xingguo. In his early career, he worked at Celox Networks in the United States, focusing on research into core router architecture and algorithm design. He subsequently held R&D positions in Microsoft’s Server Division and Search Engine Division in the U.S., and was also involved in the formulation of audio and video standards. After returning to China in 2007, he managed the development of video conferencing systems at POLYCOM China and was a founding member of POLYCOM China’s Technology Center. He holds a Bachelor’s degree in Electronic Information from Peking University and a Master’s degree in Electrical Engineering from Washington University in St. Louis.

Financing Status and Corporate Support

Xiao Yu Er Technology secured Series A funding from Lightspeed China Partners and Sinovation Ventures at its inception. In May 2015, the company completed its Series B financing, with investors including Sinovation Ventures, Chengwei Capital, Foxconn, and Lightspeed China Partners. To date, the company has completed two rounds of financing, totaling nearly $30 million. It was recognized as the fastest-growing technology company in Sinovation Ventures’ 2014 portfolio and became the quickest to join the “unicorn club” (valued at over $100 million), achieving this milestone in just 11 months. Yuan Wenhui revealed that Xiao Yu Er is currently planning its Series C financing round.

In addition to financial support, Innovation Works also provided Xiao Yu Er Technology with extensive media and celebrity resources. Even Foxconn, the world’s largest manufacturing enterprise, set up a dedicated production line for Xiao Yu Er, leveraging the close friendship between Kai-Fu Lee, CEO of Innovation Works, and Terry Gou, founder of Foxconn. Thanks to Kai-Fu Lee’s unwavering support and advocacy, Xiao Yu Er Technology has thrived since its inception.

Business Model and Market Conditions

Yuan Wenhui told VCBeat, “In fact, neither Xiaoyu Zaijia nor Xiaoyu Bangong can make much profit from hardware alone. Therefore, we started with SaaS technology, integrated hardware and software, and created three revenue models while delivering value to both enterprises and individuals.”

• One model is B2B2C. For Xiaoyu Zaijia, enterprises purchase its hardware and services—such as through collaborations with medical real estate and elderly care service providers, as well as China Unicom’s data plans—and integrate them with Xiaoyu Zaijia’s offerings into bundled solutions. These are then marketed as their own products to end users.

• Second is B2B. For Xiaoyu Office, after enterprises make purchases, Xiaoyu Office provides them with enterprise-level value-added services, such as multi-point video conferencing, teleconferencing, live streaming, and even remote corporate physician services.

• Third, regarding the traditional B2C model: Online, Xiao Yu Er has established official enterprise stores on JD.com, Tmall, and Taobao. Offline, its products are retailed in Apple Stores and Gome Electrical Appliances. Through the efforts of its sales team, Xiao Yu Er’s products are now available in hundreds of chain stores. For Xiao Yu Er, online channels primarily serve brand exposure and promotion, while sales volume relies mainly on offline distribution channels.

  
  

According to relevant data, VCBeat estimates that Xiaoyu Zaijia currently has nearly 100,000 individual users, while Xiaoyu Bangong has already secured over 1,000 corporate clients.

Future Outlook of Xiaoyuer Technology

Regarding the development of Xiaoyuer Technology, Yuan Wenhui told VCBeat: “In the future, Xiaoyuer Technology will continue to focus on its core competencies, building a robust ‘Human-Service Internet.’ Based on this network, we will expand our partner ecosystem to help experts in the elderly care industry, real estate enterprises, and others operate more efficiently and diversely, thereby enabling more household users to receive higher-quality services.It is worth noting that the entire interview was technically supported by Xiaoyu Office. Below are some screenshots secretly captured by the editor: