Chinese cloud robotic firm CloudMinds seeks to raise $500m in US listing

A girl shakes hands with a robot in Kuromon Ichiba Market, Ōsaka-shi, Japan. Photo: Andy Kelly/Unsplash

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.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.