The Guangzhou-based company has completed a new financing round, with more state-owned entities joining its investors.
►The AI unicorn company CloudWalk closed a new financing series of CNY 1.8 billion (USD 254 million).
►With strong odds of making a record for an AI company's IPO, CloudWalk is rumored to be set to go public in China by the end of 2020.
Centered on computer vision (CV) technologies, Chinese AI unicorn company CloudWalk Technology (云从科技) completed a funding round of CNY 1.8 billion (USD 254 million) with more state-owned investors. The investment brings the total financing amount to CNY 5.3 billion (USD 747 million) and the post-investment valuation is estimated at USD 5.5 billion.
Among the investors in the new round of financing, the presence of state-owned industry guidance funds is strong: China Internet Industry Fund (founded by Cyberspace Administration of China and the Ministry of Finance of China), Nansha Financial Holdings (set up by the government of Nansha District, Guangzhou) and state-owned Industrial and Commercial Bank of China (ICBC).
Supported by investors with strong government backgrounds, CloudWalk has become a partner with the Chongqing and Guangzhou governments to build smart cities and is cooperating with financial services companies to realize smart finance.
CloudWalk is renowned for being one of China’s ‘CV Four Dragons.’ The other three are SenseTime (商汤科技), Yitu Technology (依图科技) and Megvii (旷视科技). During the AI investment frenzy period, these four AI companies attracted the most attention as well as the hot money. As the investment heat cooled, AI companies have come under pressure to prove their profitability after investors burned billions of dollars on them. Even for the ‘Four Dragons' – the bell is ringing for them to fight.
How have the Dragons been faring? SenseTime remained private and sought new cash; Megvii applied for an IPO in the Hong Kong stock market but postponed it; Yitu raised USD 30 million in March, which was much less than previous hundreds of millions of dollars financing series. Compared with them, CloudWalk seems to be the soundest, from its money-raising record.
Being different from the other top three AI companies, CloudWalk is backed by purely yuan-based funds and most of its investors are state-owned. When asked about the IPO plan, CloudWalk declined to comment. Based on the financing history, the likelihood of the company going public on the Star market is higher than on the other Chinese bourses.
The survival game is still on and investors are losing patience. With questions and critiques from the public, AI companies are urged to demonstrate profitability to match their highly-pumped valuations.