Another AI unicorn that has entered large-scale models is seeking to go public.

Recently, the domestic AI voice unicorn - Yunzhisheng Intelligent Technology Co., Ltd. (hereinafter referred to as Yunzhisheng) once again submitted a listing application to the main board of the Hong Kong Stock Exchange.

As early as 2020, Yunzhisheng had sprinted to become the "first AI voice stock" on the Science and Technology Innovation Board, planning to raise 910 million yuan. At the time of the AI listing craze, AI companies such as SenseTime, Yuncong, Megvii, and Greenshentong have successively impacted the capital market. However, the stock performance of these companies after listing was not satisfactory. Subsequently, Yunzhisheng withdrew its listing application citing "strategic development considerations." Like many technology companies, Yunzhisheng also switched to Hong Kong stocks in response to changes in the capital market. In July 2023, Yunzhisheng submitted a prospectus to the Hong Kong Stock Exchange for the first time, which is now invalid.

Founded in 2012 by four PhDs in the field of AI, Yunzhisheng has gone through the most prosperous 10 years of mass entrepreneurship and AI entrepreneurship in China. It has received support from more than 30 external institutions and investors with state-owned backgrounds, including Qiming Venture Partners and Zhixin Capital. , China Internet Investment, JD.com, CICC, Qualcomm and other well-known institutions are among them, with a valuation of nearly 9 billion yuan.

01 Four Ph.D.s made “the first piece of AI voice”

The core figures of Yunzhisheng mainly come from the Institute of Automation of the Chinese Academy of Sciences, which is the earliest and most authoritative research center on speech recognition in China.

One is Liang Jiaen, chairman and CTO of Yunzhisheng, who calls himself a "science man" and a "technical man". He holds a PhD degree in pattern recognition and intelligent systems from the Institute of Automation, Chinese Academy of Sciences. One is Vice President Kang Heng, who also holds a PhD from the Institute of Automation, Chinese Academy of Sciences. The CEO is Huang Wei, a postdoctoral fellow at Shanghai Jiao Tong University, and the person responsible for the research and development of Yunzhisheng AI chip series products is Dr. Li Xiaohan from the University of Science and Technology of China.

With the development of the company, the division of labor in the team has evolved to Liang Jiaen’s focus on AI technology research and development, while the focus of the other three partners has changed to solving various business problems in the closed-loop industrialization of AI technology.

Yunzhisheng can be said to be the first "crab" in the field of domestic AI commercialization.

When he started his business, the domestic AI commercial field was completely blank, and there was no mature methodology or successful precedent for AI entrepreneurs to refer to. Although foreign technology giants such as IBM and Google were already deploying AI in various tracks at that time, how to produce home-grown industrial fruits in China is still a question that entrepreneurs need to think about.

At a time when many people in the AI field are still telling stories, building technologies, and talking about ideas, Yunzhisheng has taken the lead in launching commercial implementation.

In 2012, Yunzhisheng introduced deep neural network (DNN), took the lead in applying it to commercial speech recognition systems, and built the first permanently free speech platform in China around it. A year later, Luo Yonghao announced at the "Hammer ROM" launch conference of his Smartisan mobile phone that Yunzhisheng defeated iFlytek and became the preferred voice solution provider for Smartisan mobile phones. This brought Yunzhisheng, which was only one year old, into the public eye, and subsequently won commercial cooperation from LeTV and Sogou.

In early 2014, Yunzhisheng, aware of the trend of combining intelligent interaction with the Internet of Things, proposed the core strategy of "cloud-device-core" for the Internet of Things, and officially launched the core-making plan in 2015 and began to develop uDSP processors. and DeepNet IP technology.

With the emergence of ChatGPT, half a year later, Yunzhisheng quickly released the "Mountain and Sea Model" and demonstrated general capabilities such as language generation, language understanding, knowledge question and answer, and logical reasoning. Yunzhisheng is also known as one of the first companies in Asia to commercialize AI large language models.

From the booming smart speaker market and the explosive growth of the autonomous driving market to the "whole-house intelligence" layout triggered by the AIoT concept and the ignition of large models, Yunzhisheng's layout has been changing in line with the development trends of the industry and market.

At present, Yunzhisheng's intelligent voice chips and AI solutions have been implemented in many scenarios such as the Internet of Things, medical care, housing, education, and hotels. According to Frost & Sullivan, Yunzhisheng will be the fourth largest AI solution provider in China in 2022 in terms of revenue, with a market share of 0.6%. In the same year, Yunzhisheng ranked third in both smart living and smart hospital industries in China in terms of revenue.

02 More than 30 institutions have entered the market, with a valuation of 8.7 billion yuan

With a dazzling team and unlimited prospects in the AI field, Yunzhisheng was indeed a star company highly sought after by the venture capital circle. The company's pre-IPO valuation was nearly 9 billion.

In November 2012, the company completed angel round financing, with an exclusive investment of 13 million yuan from Heyi Guyu. Market information shows that Heyi Guyu was established in 2011 and is an equity investment fund owned by Sun Ge, director of Jinyi Culture.

One year later, Yunzhisheng received Series A financing, with Yi Guyu investing 12.33 million yuan. Qiming Venture Partners also entered the round with an investment of 50 million yuan.

From March 2015 to February 2016, the company completed Series B and Series B+ financing. In March, in the B round of financing, the company transferred US$4.47 million in capital, and the transferees included Sky Galaxy Investment and Qiming Venture Partners; at the same time, this round increased capital by US$30 million, with Zhixin Capital investing US$25 million and Qualcomm investing US$5 million. In February of the following year, the company completed Series B+ financing of 50 million yuan.

In 2017 and 2018, the "national team" entered the market, and the company completed Series C financing totaling 730 million yuan, which was jointly funded by 12 investors including JD Shangke, China Online Investment, and CICC Jiatai. Let me mention here that the investors behind China Internet Investment are all state-owned assets and government backgrounds, including CITIC Guoan Group, China Post Life Insurance, China Mobile Communications, the Ministry of Finance, China Telecom Group, China United Network Communications Group, and China Internet Investment Fund Management Co., Ltd. companies and the State-owned Assets Supervision and Administration Commission of the State Council, etc.

Subsequently, in October 2020, Yunzhisheng submitted an application for listing on the Science and Technology Innovation Board. At that time, the atmosphere for listing on the Science and Technology Innovation Board took a turn for the worse. Ant Financial's IPO was suspended, and many companies, including Yunzhisheng, voluntarily withdrew their applications for the Science and Technology Innovation Board. The withdrawal came only three and a half months after it submitted its IPO application.

At a time when AI companies are racing to go public, Yunzhisheng, as a unicorn in the voice industry, has slowed down its pace. The media once asked Huang Wei whether he would consider acquisitions. He said: "The purpose of starting a business is to become a respectable technology company. If it is just for acquisitions, there is actually no need for everyone to start a business."

Huang Wei once asked himself, IPO is very glamorous, but what kind of company do you want to be? "I don't think IPO is my end." This is the conclusion he came to. He hopes that the company will become healthier and healthier. "We have been developing for 9 years (the interview was in 2021), and I hope to develop for another 9 years." Year."

Half a year later, Yunzhisheng launched the D round of financing and raised five times, mainly to continue "blood transfusion" for old shareholders. In March 2019, the company completed the D round of financing, with a capital transfer of 89.1 million yuan and a capital increase of 53.93 million yuan; in the same year, it completed the D+ round of financing of 89.22 million yuan, and completed the D1 round of financing 2 years later, including 50 million U.S. dollars from Zhixin Capital and 500 million from Qiming Venture Partners. million US dollars, and Tianjin Pushu invested 30 million yuan; it will complete the D2 round of financing of 10 million yuan in 2022; and it will complete the D3 round of financing in April 2023, totaling 370 million yuan.

In May 2023, Yunzhisheng carried out the final financing before listing, with a total of 150 million yuan from Deyang Digital and others, and 200 million yuan from Hangzhou Fuyang. Based on this round of data, Yunzhisheng's valuation is about 8.7 billion yuan .

Before the IPO, Qiming Venture Partners held 9.4% of Yunzhisheng's shares, making it the largest institutional investor, followed by Zhixin Capital holding 8.9%, Heyi Guyu holding 8.6%, and China Online Investment holding 6.4%.

03 Are large models the answer?

The commercialization of AI has always been a mystery. Although Yunzhisheng was one of the first to implement AI, it has still not been able to turn a profit financially for more than ten years.

From 2021 to 2023, Yunzhisheng's revenue was 456 million yuan, 601 million yuan and 728 million yuan respectively. During the same period, excluding share-based payment expenses and financing costs and expenses for redemption of debt interest, Yunzhisheng's adjusted net losses were respectively 210 million yuan, 172 million yuan, 183 million yuan, 137 million yuan, with a cumulative loss of 565 million yuan.

What's even more terrible is that of Yunzhisheng's revenue of 601 million yuan in 2022, 369 million yuan is accounts receivable, accounting for more than 60%. Its accounts receivable turnover days reached 254 days, far exceeding its self-set safety line of 180 days. Last year, it made an impairment provision of 138 million yuan, which may be difficult to recover.

Yunzhisheng's main income comes from smart life and smart medical care. During the reporting period, Yunzhisheng's smart life revenue accounted for 72.3%, 77.4%, and 81.0% of total revenue respectively, and smart medical revenue accounted for 27.5%, 22.5%, and 18.9% respectively during the same period.

The company's largest expenses are mainly in hardware and research and development. Hardware costs accounted for 34.4%, 51.0% and 46.6% of revenue respectively, and research and development expenses increased from 189.3 million yuan in 2020 to 287.1 million yuan in 2022. As the "Mountain and Sea Model" continues to be developed in the later stages, this cost should continue to increase.

So, will the "big model" be the solution to this dilemma?

The big language model frenzy triggered by ChatGPT has brought great hope to all track companies, which has also driven a number of AI-related companies to hit the Hong Kong stock market.

After 2023, the number of AI, digitalization, and intelligence-related companies queuing up on the Hong Kong Stock Exchange will exceed 40, accounting for 40% of the entire Hong Kong Stock Exchange queuing up for hearings. In addition to the AI voice "Yunzhisheng", many AI companies such as the AI pharmaceutical company "Yingsi Intelligent", the intelligent driving chip "Black Sesame Intelligence", and the generative AI (AIGC) "Mobvoi" have also submitted applications to the Hong Kong Stock Exchange. Listing application. Although the context of AI in the primary and secondary fundraising markets has changed dramatically, the capital market does need new stories.

Regarding the strength of its large model, Huang Weizheng, founder and CEO of Yunzhisheng, once said, "Yunzhisheng's goal is to rival ChatGPT in general capabilities by 2023, and surpass GPT4 in vertical fields such as medical care, Internet of Things, and education." The current goal has been achieved. The extent of this is unknown, but the "race" of large models will undoubtedly be a protracted battle for Yunzhisheng, which is still losing money. This also makes it crucial for Yunzhisheng to go public and raise funds.

View more at EASELINK