Chinese IoT platform Viomi files for US IPO
Viomi, a Chinese manufacturer of smart household devices that works in partnership with smart phone maker Xiaomi and counts Shunwei Capital and Sequoia Capital China as investors, has filed for an IPO in the US.
The company has previously received one round of funding, with Sequoia, Shunwei, and Morningside Ventures together investing $20 million in 2015, according to a prospectus. Shunwei and Xiaomi are the leading external shareholders in Viomi – with 20.5% and 19.5%, respectively – because they held stakes in two of the company’s onshore subsidiaries prior to a reorganization. Sequoia owns 6.3%.
Shunwei was co-founded by Xiaomi founder Lei Jun and is a frequent backer in companies that are part of the smart phone maker’s ecosystem. For example, it is an investor – alongside Sequoia and Morningside – in Huami, a Chinese wearables manufacturer that went public earlier this year. Huami also has a strategic partnership with Xiaomi.
Viomi has created a suite of complementary internet-of-things enabled products, including water purification systems and kitchen equipment. The company has more than 40 product lines and the cloud-based platform that coordinates these devices has over 1.2 million household users. As of March 2018, 12.5% of these household users had two or more Viomi products.
The company also has approximately 700 offline stores, operated by third parties, that allow users to test products. Through the partnership with Xiaomi, it gets access to the smart phone maker’s user base, market and data resources, and support services. In addition, the two companies collaborate on R&D.
Sales came to RMB873.2 million ($131.9 million) in 2017, up from RMB312.6 million a year earlier. Smart water purification systems accounted for nearly two-thirds of revenue. Over the same period, net income rose from RMB16.3 million to RMB93.2 million.
The development of an online-to-offline (O2O) retail strategy and an ecosystem of complementary products developed by third parties is credited with helping revive Xiaomi’s fortunes ahead of its $4.7 billion IPO last month. The company has over 330 offline stores that sell its core consumer electronics as well as products manufactured by over 210 companies. Of these, 90 specialize in smart hardware and lifestyle products. However, smart phones still account for 70% of Xiaomi’s sales.
The size and pricing of Viomi’s IPO have yet to be decided.
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