Chinese Cloud Robotic Firm CloudMinds Seeks To Raise $500m In US Listing

CloudMinds, a Chinese intelligent cloud robot developer backed by SoftBank Vision Fund, has filed to raise up to $500 million in an initial public offering (IPO) in the US, joining a throng of China-based firms seeking to list away from home.

The company’s filing with the US Securities and Exchange Commission is heavily redacted and the $500 million target is likely a mere placeholder. It also has not specified the number of shares it intends to offer in the IPO.

The IPO application comes as the four-year-old robotics firm raised $300 million in a SoftBank Vision Fund-backed funding in March, giving the Masayoshi Son-led fund a 34.6 per cent pre-IPO stake in the company.

CloudMinds aims to sell half a million of its robots this year to Chinese customers from banks and malls to hospitals.

“We have built and operate an open end-to-end cloud robot system and offer it as a service to the world,” the company said.

Its signature machine is the XR1, which for nearly $50,000 comes equipped with voice, motion, and vision as a platform that other developers can then write software to customize.

Its XR1 can hold an egg, sew with a needle and pour water. Its machines, which can function as guards in a residential complex or as service droids, combine internet computing power with in-device processing, Chief Financial Officer Richard Tang said in an earlier interview with Bloomberg.

While still a newcomer in the industry, CloudMinds said its total revenues increased by 529.1 per cent from $19.2 million in 2017 to $121 million in 2018. However, its total revenues decreased by 62.1 per cent from $32.7 million in the first quarter of 2017 to $12.4 million in the same period of this year.

The company said the decrease in revenues from cloud AI solutions can be attributed to the delivery timing of purchases related to smart city projects.

CloudMinds intends to use the net proceeds of the offering for research and development of products, services, and technologies, and for potential strategic investments and acquisitions, among others.

The company’s IPO, if it pushes through, comes at a time when intelligent robots become increasingly prevalent in factories, warehouses, hospitals, hotels, shops, and homes around the world.

According to Frost & Sullivan study quoted by CloudMinds, the market size of total global robotics, measured by sales value, increased from $48.4 billion in 2016 to $75.5 billion in 2018, a 25 per cent annual rise. The market is expected to hit $201.0 billion in 2023.

On the other hand, the market size of the total global cloud robotics is expected to grow to $103 billion in 2023 from $1.6 billion in 2016.

A number of Chinese companies have trooped to the US seeking to raise funds via IPO, even as Beijing has laid out various programs and incentives to lure companies to list at home.

In April, So-Young International, a Matrix Partners China-backed online marketplace for plastic surgery services, has filed to raise $150 million in an IPO in the US. Meten International, a Chinese provider of online-to-offline (O2O) English language training (ELT) for adult students, also filed to raise $100 million in the US.

Last month, the much-anticipated Science and Technology Innovation board officially launched in Shanghai, marking the government’s major step in drawing high-potential tech companies to list. The board, however, still has to see the applications of the country’s significant tech players.