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CloudMinds Seeks to be Listed on NYSE
COVID-19 and China
CloudMinds robot. Photo credit to CloudMinds

On July 13, 2019, CloudMinds (达闼科技) submitted F-1 Form to U.S. Securities and Exchange Commission (SEC). It planned to launch initial public offering (IPO) at the New York Stock Exchange (NYSE) under the code CMDS as an ”emerging growth company” to raise USD 500 million.

Citic Bank, J.P. Morgan, and UBS Investment Bank are the representative underwriters for CloudMinds’ IPO. Not price nor the number of shares for the IPO was disclosed in the prospectus.

In the prospectus, CloudMinds addressed that the net proceeds from the offering would be used for R&D (research and development), team expansion, marketing and sales, etc.

With a mission stated in the file, “Operating smart robots for people”, CloudMinds is a company design functional robots with the power of the cloud: cloud computing and cloud storage. It is claimed that cloud services provide robots with more possibilities with the support of “cloud brain” - the smart cloud comutation center - and “nerve network” - the IoT.

CloudMinds was founded by William Xiao-Qing Huang (黄晓庆), who is with extensive expertise in telecoms technologies and previously served China Mobile Research Institute as the president. In 2016, CloudMinds collected USD 30 million in its angel round led by SoftBank China with the participation of Foxcon and Walden International. In 2017, CloudMinds received USD 100 million in series A financing round. With old investors’ participation such as SoftBank China and Foxcon, CloudMinds also introduced seven more investors to its board.

Under Huang’s leadership, CloudMinds’ revenue increased at a 230% cagr from 2017 to 2019. The drastic drop in revenue from 2018’s three months ended March 31 to 2019’s three months ended March 31 was attributed the delivery time for smart city projects.

Besides, the revenue composition demonstrates a sharp change from 2017 to 2018. The revenue generated from cloud robot and services increase by nearly seven times from USD 25 thousand to USD 14.7 million. As a company with front-end cloud-robot technologies, the revenue generated from cloud robot solutions should take the lead comparing to other revenue sources. Indeed, CloudMinds claimed that the revenue generated from cloud robot solutions could expect a larger share in revenue components.

Yet from being profitable, CloudMinds will not foresee a positive net in 2019. However, the growth of revenue outbeat the growth of costs. Being profitable might just be a matter of time based on the income statement of CloudMinds.

ANALYST
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