AI startup Cloudwalk Technology gets green light for initial public offering (IPO), making it expected to be China's first AI unicorn to go public at home.
Details: The Shanghai Stock Exchange (SSE) has accepted the IPO application of Cloudwalk on Tuesday after the Guangzhou-based company updated its financial data in early June.
Should the review process proceed smoothly, the remaining steps prior to IPO involve price inquiry, IPO roadshow, price setting, and official public debut, according to industry insiders.
Some analysts expect the IPO would raise the company's valuation to 5 billion yuan ($77.25 million).
Cloudwalk filed a prospectus with the SSE in December 2020, seeking to raise 3.75 billion yuan ($573.5 million) in an IPO on China's Nasdaq-style STAR market.
According to the prospectus, in 2020 Cloudwalk's business revenue reached 755 million yuan, yet it recorded a net loss of 720 million yuan, due to huge investment in research and development.
Last May, the US Department of Commerce's Bureau of Industry and Security added 33 Chinese technology firms, universities, and research institutes to its Entity List, banning the companies from accessing US technology exports. Cloudwalk, Sensor Time, Megvii and Yitu, known as China's four AI "dragons", were added to the list.
Context: China's cyberspace regulators are imposing tighter restrictions on data collection and data storage. Authorities are also more broadly pushing for companies to list domestically.
Observers say that a timely IPO can help alleviate financial burdens on the cash-hungry AI startups and focus more on making breakthroughs in bottleneck technologies, in particular the underlying algorithm.