Beijing-based CloudMinds, an operator of cloud-based systems for intelligent robots, has filed to raise up to $500 million in an initial public offering (IPO) on the New York Stock Exchange, joining a slew of Chinese tech companies seeking funding abroad despite efforts from the government to attract domestic listings.
Why it matters: CloudMinds says it is the first in the world to commercialize a cloud-based robotics system in a rapidly growing market. Developments in cloud and robotics are critical to smart manufacturing, an important part of China’s initiative to become a global leader by 2025 in core technologies.
- The government is implementing financial reforms—of which its new STAR Market Nasdaq-style technology bourse in Shanghai is the centerpiece—in an effort to lure tech companies to list domestically and push forward this initiative.
- The US remains an attractive IPO destination for Chinese companies because of its maturity and liquidity relative to domestic capital markets, which have tightened as the country’s economy slows.
- CloudMinds joins China Starbucks challenger Luckin Coffee and cosmetic surgery platform So-Young in US IPOs this year.
Details: Citigroup, JP Morgan, and UBS Investment Bank are the joint underwriters on the deal, but detailed pricing terms were not disclosed in the filing. The company plans to list on the New York Stock Exchange under the ticker symbol “CMDS.”
- The company said in its prospectus that it intends to use the net proceeds for research and development, marketing and sales, and strategic investments, among others.
Context: The global robotics market is expanding rapidly. The sales value of service robots reached $6.6 billion in 2018, an increase of 39% from the previous year.
- In March, the cloud robotics firm aimed to raise $300 million in a SoftBank Vision Fund-backed funding round.
- CloudMinds expects to triple its revenue this year. However, its revenues dropped 62.1% in the first quarter of 2019 to $12.4 million from $32.7 million in the first quarter of 2017 due to “delivery timing” related to smart city projects.
- Robots that run on a cloud-based system are more intelligent and versatile because their ability to handle a large amount of data and computation are not limited by local storage space, according to the company.
- CloudMinds’ client portfolio includes humanoid robots like SoftBank’s CloudPepper as well as smart vending machines, security robots, and virtual AI robots. The company is backed by prominent investors including SoftBank’s Vision Fund and electronics manufacturing giant Foxconn.