Kingsoft Cloud, China-based enterprise software producer Kingsoft’s cloud services subsidiary, filed on Friday to raise up to $100m in an initial public offering in the US.
Formed in 2012, Kingsoft Cloud maintains a cloud services business that has a 5.4% share of the market in China according to research firm Frost & Sullivan, making it the third largest provider in the space.
The spinoff increased revenue 78% year on year in 2019 to $568m while net losses remained relatively steady at approximately $160m.
Half the IPO proceeds will go to growing Kingsoft Cloud’s central infrastructure while 25% will fund further development of its artificial intelligence, big data, cloud and internet-of-things technology and 15% has been reserved for expanding internationally.
Kingsoft Cloud has raised about $700m since being spun off, securing $1.8m from consumer electronics manufacturer Xiaomi in 2012 and $20m from private investor Yuri Milner in 2013.
Xiaomi, Kingsoft and IDG Capital added $66.6m in a 2015 series B round followed by a $60m series C backed by Kingsoft, IDG and an affiliate of China Asset Management the following year.
Brokerage firm China Merchants Securities led the company’s $50m series C-plus round later in 2016 at a $1.1bn valuation before Kingsoft, Liyue Investment and China Minsheng supplied $300m in a 2017 series D round that valued it at $1.9bn.
Kingsoft and FutureX Capital each provided a further $100m in funding for Kingsoft Cloud in early 2018. Parent company Kingsoft retains a 53% share of the spinoff while Xiaomi owns 15.8% and FutureX 5.7%.
JP Morgan Securities, UBS Securities, Credit Suisse Securities (USA) and China International Capital Corporation have been appointed underwriters for the offering, which is set to take place on the Nasdaq Global Select Market.
