SoftBank-backed cloud robotics and artificial intelligence startup CloudMinds is slashing its global workforce as it burns through cash after repeated attempts to list on the stock market, people familiar with the matter said.
Headed by former China Mobile research whiz Bill Huang, money-losing CloudMinds is the latest SoftBank portfolio company to lay off workers.
The job cuts include in China, two sources said, where the bulk of the company’s workforce is based and where it generates most of its revenues.
All the sources declined to be identified because the information is not public.
CloudMinds did not respond to requests for comment and a SoftBank representative declined to comment.
Around 175-225 people are being laid off among CloudMinds’ around 700-strong workforce in China, one of the sources said.
The layoffs will also leave the startup with only a nominal presence in the United States and Japan, two of the sources said, with the Silicon Valley office being closed and a small number of remaining staff moved to an office in Irvine, California.
Valuations at the Japanese tech giant SoftBank‘s sprawling portfolio have come under increased scrutiny as investors question CEO Masayoshi Son’s bullish view of how quickly new technology can come onstream.
CloudMinds, which is incorporated in the Cayman Islands, last year set out ambitious plans to list in the United States with predictions of rapid growth in the market for intelligent, cloud-connected robots.
However roadshows over the summer were met with a cool reception from investors unfamiliar with the company and unconvinced about its business model, one of the sources said.
Investors were also wary of investing in a SoftBank-backed company, the source said, as market sentiment was turning against another portfolio company, office-sharing firm WeWork.
Burning through its cash, CloudMinds is now hoping to list in mainland China after an attempt to list in Hong Kong also fell flat, the source said.
CloudMinds suffered a net loss of almost $100 million in the six months to last June, a regulatory filing showed, compared to a loss of $65 million in the same period a year earlier.
A request for further funding from SoftBank‘s Vision Fund was turned down, the source said.
CloudMinds products include humanoid robots XR-1 and Cloud Pepper, an enhanced, cloud-connected version of the Pepper robot from SoftBank‘s robotics division.
Many of the company’s products are not fully commercialized, three sources said, with CloudMinds struggling to attract customers for Cloud Pepper in some markets.
The startup’s struggle to market Cloud Pepper reflects the broader commercial disappointment of the robot, which with limited functionality and high prices has fallen short of Masayoshi Son’s dreams of it becoming a companion robot.