AI Firm CloudWalk Gets Green Light for Shanghai IPO
CloudWalk Technology, an AI platform specializing in facial recognition services, received approval from the China Securities Regulatory Commission on Wednesday for a public listing in Shanghai. The move will make it the second publicly listed firm among the “Four Leading AI Computer Vision Startups,” which include SenseTime, Megvii, YITU Technology and CloudWalk.
CloudWalk submitted its prospectus to the Shanghai Sci-Tech Innovation Board (STAR Market) in December 2020, then received several rounds of inquiries. It finally obtained approval in July of last year. As for the three other companies, Megvii’s listing has not been approved, while YITU Technology, which first submitted its prospectus, has withdrawn its Shanghai IPO application, and SenseTime listed on the Hong Kong Stock Exchange at the end of last year.
Founded in 2015, CloudWalk is an AI enterprise that provides efficient man-machine collaborative operating systems and industry solutions, and is committed to boosting the industrialization process of AI and the intelligent transformation and upgrading of various industries.
CloudWalk plans to raise about 3.75 billion yuan ($589 million) through this Shanghai IPO. The funds will mainly be used for a man-machine collaborative operating system upgrade project, a Qingzhou KaaS Cloud Ecosystem and an AI solution comprehensive service ecological project.
According to the updated prospectus, the revenue of CloudWalk was 484 million yuan ($76 million) in 2018, 807 million yuan in 2019 and 755 million yuan in 2020. The net profit attributed to parent company owner’s was -181 million yuan in 2018, -1.708 billion yuan in 2019 and -690 million yuan in 2020. The total loss in three years was about 2.579 billion yuan. By the end of 2020, the accumulated undistributed profit on a consolidated basis was -1.435 billion yuan, and there were large uncompensated losses.
Due to the large expenses of investments in R&D, management and sales team in the early stages, CloudWalk revenue cannot fully cover its costs. During the reporting period, the R&D expenses of CloudWalk were 148 million yuan in 2018, 454 million yuan in 2019 and 578 million yuan in 2020, accounting for 31%, 56% and 77% of the revenue of each period respectively.
The company also predicts that the revenue of the company in the next five years (2021-2025) will be 1.201 billion yuan in 2021, 1.910 billion yuan in 2022, 2.542 billion yuan in 2023, 3.259 billion yuan in 2024 and 4.064 billion yuan in 2025, with a compound growth rate of 36%. CloudWalk expects to turn losses into profits in 2025.
