In Kickstarter’s first-quarter crowdfunding rankings this year, two laser welding machines appeared, with sharply different results.
An unheralded newcomer, XLaserLab, launched a multifunction laser welding machine that raised more than USD 5 million, ranking fourth among all campaigns. By contrast, xTool, a well-known brand in handheld laser engravers, introduced its MetalFab handheld laser welder and raised about USD 1.43 million.
In September, XLaserLab pre-launched its E3 ultraviolet laser engraver on Kickstarter. The company said the E3 could engrave nearly any material and described it as the lightest professional ultraviolet laser engraver currently on the market.
Consumer laser engraving machines remain a niche category, but not an obscure one. xTool’s annual revenue has surpassed USD 2 billion, according to the company. LaserPecker, which began with handheld laser engravers, reports annual revenue of more than USD 500 million.
No hardware company dominates indefinitely. New challengers emerge as incumbents mature, and XLaserLab is positioning itself as one such contender.
Before its consumer products appeared, XLaserLab was largely unknown outside the industry. Its parent company, X Photonics, also known as Xinghan Laser, is familiar to enterprise customers. X Photonics produces more semiconductor lasers than any other company globally. In China, the company said three out of every ten core pump sources used in laser equipment are developed and manufactured in-house.
Despite that scale, XLaserLab entered the consumer hardware market as a novice.
Before 2022, X Photonics chairman Zhou Shaofeng said he was unfamiliar with Anker Innovations or xTool and had little understanding of cross-border e-commerce:
“We people who do B2B feel disconnected from the world. In the highly specialized field of lasers, everyone competes on specs and performance. It wasn’t until 22 years later that I realized that people all over the world were making products, and that what they were making was so close to what we were making, and that we could do it too.”
When Anker went public with annual revenue in the tens of billions of RMB, Zhou reassessed X Photonics’ own business. Although the company generated roughly USD 3 billion in annual revenue, profits amounted to a much smaller chunk, while customer margins were shrinking. Zhou concluded that the B2B model was nearing its limits and that a new direction was needed.
The consumer market offered scale and imagination, but not an obvious path to execution.
Endless possibilities
Two years ago, a Reddit user posed a simple question: “Is a laser welding machine worth buying?”
Commenters generally agreed that welding machines were versatile tools, yet few could recommend a specific laser welding brand. One respondent wrote:
“I built a cheap Chinese laser welding machine for someone, spent over USD 9,000, and it looked pretty good… A US machine might cost about USD 30,000–90,000.”
Laser welding machines are commonplace in manufacturing. About 60% of laser equipment is used in industrial settings, where dense laser beams serve as a heat source for welding.
According to national data on China’s laser industry, global sales of laser equipment reached USD 21 billion in 2021. China accounted for RMB 82.1 billion (USD 11.5 billion) of that total, a year-on-year increase of about 18.6%, representing roughly 60% of the global market.
Laser cutting and marking technologies in China are relatively mature. Laser welding is widely viewed within the industry as the next major phase of technical development, partly because it is less standardized and requires greater precision and motion control.
That gap caught Zhou’s attention. X Photonics decided to launch a consumer-focused laser welder, moving from internal approval to a Kickstarter campaign in about four months.
“We didn’t do very systematic research on laser welders as a category. We just had some industrial welding machine data. Looking at the top ten industrial welding applications, we inferred that there might be a potential opportunity in the consumer market,” Zhou told 36Kr.
In overseas markets, X Photonics observed that many households already own welders, typically lightweight units that run on standard household power. These machines are commonly used to repair stainless steel fixtures, garden railings, doors and windows, and vehicles, including welding parts, repainting cars, and reattaching doors.
Those use cases shaped the design of the XLaserLab X1 and X1 Pro.
The X1 Pro is positioned as a portable, high-power laser welder for beginners and small workshops. Weighing 19 kilograms and compatible with household power, it combines welding, including underwater welding, cutting, cleaning, and CNC (computer numerical control) modification. It supports welding thicknesses from 0.5–3.0 millimeters and materials such as stainless steel, carbon steel, and aluminum alloys. According to XLaserLab, its welding speed is five times faster than TIG (tungsten inert gas) welding. Pricing ranges from USD 3,999–4,299, including a wire feeder.
So far, the company has delivered more than 2,000 units of the X1 and X1 Pro, with a reported fulfillment rate of 90%.
As X Photonics’ first consumer-facing product, the machine emphasized functionality and ease of use.
“B2B clients already have some operational foundation and can adjust based on their needs. C-end customers are different, they have to be able to use it right out of the box,” Zhou said.
Strong products, limited experience
For an upstream laser manufacturer, moving from B2B to B2C has proven difficult. X Photonics and Zhou went through repeated rounds of market adjustment.
Before 2022, the company focused on R&D and manufacturing of semiconductor lasers used in automotive manufacturing, power generation equipment, consumer electronics, and aerospace. Zhou recalled that in 2021, factories were operating at full capacity and orders routinely outpaced supply.
After 2022, price competition intensified across the laser industry. Revenue continued to rise, but profitability stalled. X Photonics began exploring new directions, including LiDAR (light detection and ranging). It developed a high-reliability 940-nanometer semiconductor laser for automotive-grade 1,550-nanometer LiDAR systems, with failure rates below 100 FIT, or failures in time. Built on mature EDFA (erbium-doped fiber amplifier) technology, the product became one of the company’s more established LiDAR offerings.
Over the past three years, X Photonics has oscillated between enterprise and consumer ambitions. The company initially stayed close to enterprise customers before revisiting the consumer market.
The concept was appealing, but execution proved difficult.
“We thought if we led in B2B, we could survive and grow. But after competition became saturated, many B2B deals depended on ecosystems,” Zhou said.
Products tied to the BYD ecosystem, for example, are unlikely to sell into the ecosystem of Contemporary Amperex Technology (CATL), and vice versa.
“I thought we had a USD 3 billion market, but in fact we could only target half of it. The market wasn’t large enough, and competition was so fierce that it couldn’t meet our growth needs,” Zhou said.
He reached a blunt conclusion: B2B offers limited pricing power and little brand equity, while B2C offers both. In Zhou’s view, shifting from supplying laser components to selling consumer products is a form of dimensionality reduction. The technical foundation is in place, but success in the consumer market depends as much on sales and operations as on engineering.
That gap became clear during XLaserLab’s Kickstarter campaign. Lacking overseas e-commerce experience, the company did not build an independent store or establish an Amazon presence, missing an early wave of traffic.
“We didn’t know how to build an independent site or use Amazon, and that cost us tens of millions in lost traffic,” Zhou said.
For X Photonics and XLaserLab, the consumer market is now within reach. Yet whether the company can adapt to the speed, flexibility, and intensity of B2C competition remains an open question.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Leslie Zhang for 36Kr.