AI Firm 4Paradigm Updates Prospectus for Hong Kong IPO
According to the Hong Kong Stock Exchange (HKEx), Chinese AI firm Beijing Fourth Paradigm Technology Co., Ltd. (4Paradigm) updated its prospectus on Wednesday for a public listing to the stock market’s main board, with Goldman Sachs and CICC serving as co-sponsors.
According to the prospectus, net proceeds from the IPO will mainly be invested in its artificial intelligence platform, including the strengthening of basic research, technical capabilities and product development, expanding products, building its brand and entering new industries.
In fact, on August 13 last year, 4Paradigm submitted its prospectus to Hong Kong stock market officials. However, due to its failure to pass the hearing within six months, on February 14 this year, the IPO application status of 4Paradigm was deemed “invalid.” The firm responded at that time that “the listing process is still advancing normally. We are currently updating the materials.”
Established in 2014, 4Paradigm focuses on the field of decision-making AI technologies. By providing platform-centered AI solutions, enterprises can realize rapid transformation of AI at scale, enhancing their decision-making ability. According to China Insights Consultancy, 4Paradigm was the largest platform-centered decision-making AI technology provider in China in 2020, accounting for an 18.1% market share.
According to its latest prospectus, the industries served by the company include finance, retail, manufacturing, energy and power, telecommunications and health care. In the first three quarters of 2021, the company served 55 companies that were named by Fortune Global 500 and are listed companies. The number of enterprise customers increased by 82.4% year-on-year to 186.
With the increase of the customers, 4Paradigm has also increased rapidly year by year. In 2018, 2019 and 2020, its revenue was 128 million yuan ($20.2 million), 460 million yuan and 942 million yuan, respectively. Revenue in the first three quarters of 2021 increased by 134.3% year-on-year to 1.345 billion yuan, far exceeding the annual level in 2020.
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In terms of losses, in the first three quarters of 2018, 2019, 2020 and 2021, after deducting the impact of non-cash compensation based on shares, the adjusted operating losses were 213 million yuan, 318 million yuan, 386 million yuan and 391 million yuan, respectively, showing an expanding trend.
According to Sina Tech’s statistics, as of the Hong Kong IPO, 4Paradigm has completed 12 rounds of financing. After receiving $230 million in a round C+ of financing in April 2020, the company was valued at $2 billion. It then received $700 million in fresh financing in 2021. The pre-IPO valuation of the firm is $3 billion.
