A promising robotics company with its R&D facilities in Shenzhen has filed with the SEC to do an IPO in the US, according to local media. If successful, CloudMinds will raise US$500 million.
Founded in 2015, CloudMinds calls itself an “intelligent cloud robot developer”. Headquartered in Beijing, but with R&D facilities in Shenzhen and Silicon Valley, it was founded by William Huang Xiaoqing, Dean of the School of Electronic Information and Communications of Huahzong University of Science and Technology. He previously headed China Mobile’s Communications Research Institute.
CloudMinds has developed service robots for multiple applications, such as patrolling residential buildings and guiding the blind. It also holds patents for its mobile-intranet cloud service, which is “an open end-to-end cloud robot system” that can assist clients with secured IT, administrative, AI and other cloud-based intelligent services. Equipped with the cloud robot system, the robots can combine internet computing power with in-device processing. Its signature machine, XR1, is a customizable service robot with voice, motion and vision that sells for nearly US$50,000.
Despite the strong R&D capability, the company has been struggling to become profitable. Revenue of US$121 million last year was up more than five times since 2017, but net losses widened to US$157 million last year, and came in at US$60m in Q1 this year.
The company attributes the mounting losses to timing of purchases related to smart city projects. It is confident of selling half a million machines to malls, banks and hospitals this year.
Investors seem to like the story. CloudMinds raised US$300 million in a funding round backed by SoftBank Vision Fund this March, which makes Softbank its largest shareholder with a 34.6% pre-IPO stake.
If the full US$500 million is pushed through, CloudMinds’ listing would become one of the biggest by Chinese tech firms in the US this year, on a scale similar to video streaming site Douyu and high-tech coffee purveyor Luckin. The company intends to use the funds in R&D, services, technologies and potential strategic investments and acquisitions.
CloudMinds’ IPO comes with the expansion of robot applications in various industrial and daily environments. According to a Frost & Sullivan study quoted by the company, the market size of total global robotics hit US$75.5 billion in 2018, up 25% annually since 2016, and is expected to increase to US$201 billion in 2023.