Internet and telecommunications firm SoftBank has exited China-based artificial intelligence technology provider AInnovation in an initial public offering in Hong Kong, following in peer SenseTime’s footsteps.
AInnovation raised HK$1.2bn ($154m) in the IPO, pricing 44.7 million new shares at the bottom of their HK$26.30 to HK$27.30 range on its first day of trading. The company’s market capitalisation stands at about $11.2bn.
Incubated in 2018 by venture capital firm Sinovation Ventures, AInnovation has built an AI software platform that enables enterprise customers operating in traditional industries such as finance and manufacturing to digitalise their businesses.
The company logged about $87m in revenue during the first nine months of 2021, representing an 86% increase from the year before, though its losses rose by 85% to $68.5m in the same period.
SoftBank’s Vision Fund 2 supplied series D funding for AInnovation in June 2021, a deal which followed a series C round of similarly undisclosed size six months earlier at a valuation of at least $1bn. Online lender CreditEase is among its earlier investors.
The news came after another China-based company SenseTime, which focuses on image recognition and which counts SoftBank and fellow corporates Qualcomm, Alibaba, Suning and Dalian Wanda as investors, listed in an $851m offering on the Hong Kong Stock Exchange in December 2021.
In addition, Reuters reported yesterday that another SoftBank portfolio company, US-headquartered cybersecurity software provider Cybereason, has confidentially filed for an initial public offering in its home country expected to value it at $5bn.
Cybereason has secured sponsors for the proposed IPO – which would take place in the second half of this year – according to the sources. The date and scope of the offering would depend on market volatility, they added.
Founded in Israel two years before it relocated to the United States and emerged from stealth in 2014, Cybereason has built an AI and machine learning-equipped cybersecurity tool that helps thwart cyberattacks directed at communication endpoints including desktops, laptops and smartphones.
Internet technology group Alphabet’s Google Cloud unit helped the company close a $325m series F round in October 2021 but SoftBank has backed it over multiple rounds and aerospace manufacturer Lockheed Martin was also an early investor.
SoftBank has been active in the growth-stage space primarily through its two Vision Funds, but also invests in China through its China Ventures Funds, on behalf of regional corporate venturing unit SoftBank Ventures Asia, as well as SB China Capital, also known as SBCVC.
Rajeev Misra, chief executive of SoftBank Investment Advisers, which manages the Vision Funds, expressed optimism regarding China-based companies last month, saying he believes the ongoing “turmoil” fuelled by government restrictions on local tech companies will come to an end in the latter half of 2022.