Preparing for IPO, UCloud is Stepping Up to the Top
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UCloud's Conference "Think in Cloud". PHOTO: Credit to Think in Cloud.

UCloud (优刻得科技) is a company engaged in technology development, consulting, and technological services in fields like internet technology, computers, software, and auxiliary equipment, electronic products, computer system integration, telecommunications services, cloud platform services, cloud software services, cloud infrastructure services, big data services, and artificial intelligence.

The company is a leading neutral third-party cloud computing service provider in China, and is among the first batch of enterprises, certified by the Trusted Cloud under the Ministry of Industry and Information Technology (工信部), which is the state agency of the People's Republic of China responsible for regulation and development of the postal service, the Internet, broadcasting and communications, production of electronic and information goods, and the software industry. Till now, only 57 enterprises in China were recognized by this organization. As the literal meaning of the name "Trusted Cloud" suggests, the governmental organization certified enterprises are the most "trusted" ones in the industry in China. Also, in terms of the development of high tech and newly emerged sectors in China, the government's opinion is very well accepted and followed by the industry. Unlike how the Chinese government's immense power over businesses in China was pictured in the western world, the fairly strict control and regulation perhaps reflect the protection and care for them and the public due to the high-risk and unclear nature of the newly emerged sectors.

One of the company's major responsibilities is to provide basic IT architecture services necessary for enterprises such as storage resources and network resources based on the company's in-depth understandings of the Internet and abundant knowledge about traditional enterprises. The IT architecture services UCloud offers, including both public clouds and private clouds for traditional companies and new internet companies, cater to business needs in different scenarios. The company also provides enterprises with services utilizing big data and artificial intelligence technologies.

Product and business scope

Relying on multiple data centers located in Asia Pacific, North America and Europe, as well as many offline service stations in Beijing, Shanghai, Guangzhou, Shenzhen, and Hangzhou, etc, the company has provided cloud services for tens of thousands of enterprises around the globe including traditional companies and new internet companies.

The company's customers are from a wide range of industries and sectors including the Internet, finance, education, new retail, healthcare, and government. According to IDC, in 2017, the company accounted for 5.30% of the public cloud IaaS market in China, ranking the sixth right after Alibaba Cloud, Tencent Cloud, China Telecom Cloud, Kingsoft Cloud, and AWS. According to NIST (National Institute of Standards and Technology), cloud computing is a model which requires payment for a certain amount of services offered by the service provider. It provides convenient and on-demand network access to an allocable computing resource sharing pool including internet, server, storage, application software, services, and etc. These resources can be quickly provided upon demand with only a limited amount of management and very little interaction with service providers. Cloud can be divided into public cloud, private cloud and hybrid cloud depending on deployment method. It can also be divided into IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and SaaS (Software as a Service) if differentiated by service model.

Major products the company offers are IaaS in public cloud field, providing computing, internet and storage resources for enterprises and developers. Public cloud is the core business of the company since its establishment, and it also has always been the paramount income generator of the company. Private cloud is the key area under development in very recent years, and the amount of income generated is increasing. Big data and artificial intelligence are the company's primary R&D focus. Currently, revenue from these two is not high, but they may lead the company's new profit growth in the future.

Company's direction is under tight control

About 50% of the company shares are held under the following persons and organizations. JI Xinhua (季昕华), CEO of the company, has 14.09% of the company share, being the largest shareholder of the company. The second biggest shareholder is Legend Capital (君联资本), 10.38%; similarly, ORIZA Holdings (元禾控股) holds 10.27% of the company's share. While HUA Kun (华琨), COO of the company, and MO Xianfeng (莫显峰), CTO hold exactly the same amount of the company's share, 6.49%, respectively. These three all have extensive experience in Cloud computing-related businesses.

Strong power over the company the CEO has will benefit the company's development in a way that the major decisions closely regard to the company's future will be made mainly considering the CEO and the company management's opinion, which forbids possible manipulation from big investors outside the company, but holds significant amount of company share, occur during big decision making process.

Financial performance

In 2016, UCloud achieved revenue of approximately USD 88 million, maintaining a growth rate of over 140%. In 2017, after Huawei's entry of the market, the competition in the public cloud field became more intense. Nevertheless, the company seems not being affected at all by this, in 2017, the company's revenue climbed to about USD 220.4 million, the growth rate that year exceeded 150%. 

Established in 2012, the company completed 5 rounds of financing altogether, the first three rounds were before 2015, and led by mainly international investors like Bertelsmann; the latest two rounds were in 2017 and 2018, however, were mainly led by Chinese funds. The company raised approximately USD 315.9 million comprehensively by far and is valued at about USD 1102 million

The company also just received IPO Readiness Assessment and Preparation Service offered by China International Capital Corporation (中金公司), the two parties signed the Agreement on service document on 24th Oct 2018. This signifies the company is officially queueing up for IPO. Though almost no IPO related rumor about this company being spread in the market, the company is clearly readying itself for it, and this may happen in 2019.

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