(Bloomberg) — EcoFlow Inc., a Sequoia-backed portable battery maker, is betting on rising demand from outdoor enthusiasts and doomsday preppers to boost its business before an initial public offering in its hometown of Shenzhen, China.
Two years into an era of lockdowns and travel restrictions, the growing popularity of outdoor activities from camping to tailgating is growing sales of portable power packs, EcoFlow founder and Chief Executive Officer Bruce Wang said in an interview. Families preparing for power disruption from natural events are also helping sales, which will at least double next year with growth from China leading the jump, he added.
EcoFlow is among a number of Chinese startups that the country has designated “little giants” — tech firms that have a particular strength that can make them competitive on the global stage — which Beijing is helping to grow bigger faster. Favorable taxation, financing and talent acquisition policies are among the measures designed to give them a hand. That’s in stark contrast to the administration’s far-reaching crackdown on its internet sphere, where the influence of already global companies is being reined in.
The four-year-old startup, which also has an office in Tokyo, is planning an IPO on the Nasdaq-style ChiNext board in Shenzhen in the next two to three years, following in the footsteps of battery giant Contemporary Amperex Technology Co., which was listed on the same bourse in 2018. Another consumer-oriented battery maker, Anker Innovations Technology Co., doubled its valuation in a Chinese mainland IPO last year.
“We think Shenzhen is a very nice place because it has already attracted a large number of high-tech, high-growth companies. We hope investors who know about the new energy industry can find us there,” 33-year-old Wang said.
Learn more about Beijing’s push to accelerate the growth of ‘little giants’
Founded in 2017 by the former DJI engineer, EcoFlow makes portable power stations about the size of a printer that cost several hundred dollars each. It also sells solar panels and more heavy-duty units for the home, with the top model going for $3,599. North America, Europe and Japan contribute roughly 80% of the company’s sales. EcoFlow has used crowdfunding platform Kickstarter to get some products off the ground and stir up interest ahead of release, and it’s now targeting young middle-class consumers in China as its next growth driver.
EcoFlow’s prices are among the highest in China, but the company enjoyed strong sales during the Singles’ Day shopping festival, Wang said, adding that “our customers would be more interested in the value our products can bring to their outdoor experience, not the price tag of the product.”
In June, the startup raised more than $100 million in its latest funding round, backed by Sequoia’s China fund, HillHouse and CICC and valuing the firm at “several billion dollars,” according to Wang. The funds are being used to boost research, development and marketing efforts worldwide, and while EcoFlow may consider further fundraising, there’s no urgency to do so as it’s already profitable.
The global portable power station market is expected to reach around $500 million by 2026, from an estimated $358 million in 2021, according to consultancy MarketsandMarkets Research. The wider adoption of smart electronic devices, electric vehicles and off-grid power applications, along with the requirement for uninterrupted power and emergency fallbacks, are seen as the big contributors to the market’s expansion.
Outside of China, EcoFlow competes against startups including Jackery Inc. and Goal Zero, an NRG Energy Inc. affiliate.
“We have a global strategy and will push expansion next year,” said Wang.
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