Undeterred by failed US listing, cloud robot maker CloudMinds eyes HK IPO

The fundraising suggested a pivot of the company's IPO focus to capital markets that impose fewer regulatory straitjackets.

AI robot maker CloudMinds (达闼科技) is rumored to be seeking an IPO in Hong Kong to raise up to US$500 million, Chinese media broke on March 6.

This bid will be the robotic startup’s second shot at an IPO after its failed US listing in 2019.

In July 2019, CloudMinds filed a prospectus with US Securities and Exchange Commission to list on New York Stock Exchange under the ticker symbol CMDS.

According to the now defunct prospectus, SoftBank is CloudMinds’ single largest shareholder, owning a 34.6% stake, followed by Huang Xiaoqing, founder and CEO of the Beijing-headquartered robotic startup, who holds 17.4% of the equity.

Nonetheless, the IPO bid was scuttled after CloudMinds was put on the Entity List released by US Department of Commerce, barring some Chinese firms from securing technology and funds from US investors.

US Department of Commerce issued a notice to CloudMinds in July 2019, prohibiting the firm from sending US-developed technologies and related information back to its Beijing head office, unless otherwise stipulated.

CloudMinds, which claims to be a pioneer of so-called cloud robotics, designs robots not with in-built controllers but able to react to commands sent via a 5G-powered cloud system.

The company is also a supplier of miscellaneous robot products used for delivery, disinfection and security patrol, among other usages.

Banking on emerging enablers like ChatGPT, it is also betting big on humanoid robots, which it said have great potential for mass adoption in scenarios like senior care.

Following its failed US stock offering, CloudMinds raised upwards of 1 billion yuan (US$145 million) in 2021 — the latest round of funding — led by Shanghai Chengtou and Shanghai Guosheng Group, two state-run investors.

The fundraising suggested a pivot of the company’s IPO focus to capital markets that impose fewer regulatory straitjackets.

Commenting on the funding then, Huang Xiaoqing said CloudMinds had end-to-end full-stack core technologies. The firm’s Harix cloud robotic operation system, smart flexible end effector series SCA, and cloud-controlled robot series XR 1 — released in December 2020 — met with market success, putting the company on track to building household “nanny” robots.

“Smart service robot, as represented by cloud-controlled robot, is a killer application in the 5G era; it is the third computer of mankind,” said Huang of CloudMinds. “It definitely will overtake smartphone and automobile to be the largest industry in the digital age.”

However, despite CloudMinds’ renewed interest in an offering, market pundits believe this will not materialize anytime soon, at least not in 2023, given the usually slow screening of IPO pipelines at the HKEX.

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Ni Tao

Ni Tao is the founder and editor-in-chief of cnrobopedia. Prior to cnrobopedia, he had a full decade of experience with a major state-run English-language newspaper as a tech reporter and opinion writer. He is also a communications specialist, having provided consultancy services to established firms like Siemens, Philips, ABinBev, Diageo, Trip.com Group (Nasdaq: TCOM, HK: 9961), Jianpu Technology (NYSE: JT) and a handful of domestic startups. A graduate of Fudan University, he writes widely about China's business and tech scenes and other topics for global publications including South China Morning Post, SupChina, The Diplomat, CGTN, Banking Technology, among others, and tries to impart his experience to students at Fudan University Journalism School, where he is a part-time lecturer. When he's not writing about robotics, you can expect him to be on his beloved Yanagisawa saxophones, trying to play some jazz riffs, often in vain and occasionally against the protests of an angry neighbor. Get in touch with him by dropping a line at nitao0927@gmail.com.

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