Chinese mobile intelligent terminal solutions provider Shanghai Longcheer Technology has raked in $100 million in a Series B round of financing after the firm’s failed listing attempt three years earlier.
The deal was co-led by Chinese government-backed investment firm Shenzhen Capital Group, and Shenzhen Qianhai Wanrong Hongtu Investment Fund, a 4-billion-yuan dual-currency fund that specialises in venture capital (VC) investments in China.
Semiconductor-focused investor Accurate Capital; Jintaifu Capital Management, an investment platform of China’s Xiangcai Securities; and Huaxu Industrial Investment Fund participated in the round. Other investors include Forebright Capital Management, a fund management spin-off from Hong Kong-listed financial services firm China Everbright, and growth equity fund FutureX Capital.
The fundraising came over three years after Longcheer’s second failed attempt for a domestic initial public offering (IPO). It had filed a prospectus in December 2017 to sell up to 70 million shares for 427 million yuan in an IPO on Shenzhen’s ChiNext Board.
But the application was later denied by the Issuance Appraisal Committee of the country’s securities regulator China Securities Regulatory Commission (CSRC), due to concerns including the firm’s narrow profit margin and its frequent related transactions with client and shareholder Xiaomi. That followed its first IPO application, which had also been rejected in 2015.
As of December 2017, Xiaomi held a combined 20% stake in Longcheer through an affiliate and Shunwei Captial.
Founded in 2002, the firm focuses on the design, R&D, and production of intelligent products including smartphones, tablet PCs, smart wearables, smart home products, Bluetooth speakers, as well as virtual reality (VR) and augmented reality (AR) products.
With a team of over 3,000 R&D professionals, Longcheer operates from research centres in Shanghai, Shenzhen, and southern China’s Huizhou City, as well as branches across Beijing, Hong Kong, South Korea, and the United States. Its products are manufactured from factories in China, India, and Vietnam.
As an original design manufacturer (ODM) that serves clients like Chinese smartphone brands Xiaomi, Lenovo and Huawei, Shanghai-based Longcheer plans to use the new proceeds to invest in technologies like 5G and to speed up its business layout in developing mobile intelligent terminals powered by Artificial Intelligence of Things (AIoT).
In a statement, Longcheer’s founder and chairman Du Junhong said: “The upsurge of new technologies, such as AI, big data, and cloud computing, continues to expand the potential of intelligent consumer electronics. This has enabled the realisation of smart home, autonomous driving, smart factories, and smart cities.”
“As the society becomes more intelligent, the ODM industry is ushering in new development opportunities, alongside higher industry standards,” he said. “Longcheer will continue to make investments in these new areas to expand beyond our focused ODM and mobile intelligent terminal business.”