China chatbot maker Xiao-I trades down after US IPO
China-based chatbot company Xiao-I has traded down 17.5% since raising USD 39m in a disappointing NASDAQ IPO on March 9.
The company offered 5.7m American Depository Shares (ADS) – 300,000 fewer than expected – at USD 6.80 apiece, the low end of the indicative range. The stock closed on USD 5.80 on its first day and was trading at USD 5.61 as of midday March 17, giving the company a market capitalisation of USD 33.7m.
Xiao-I has raised several private funding rounds since its inception in 2001, according to AVCJ Research, although no private equity investor holds more than 5%.
IDG Capital invested several million US dollars in 2005 and participated in a Series B round alongside Intel Capital, DFJ Dragon Fund, and Zero2IPO Capital in 2007. China Broadband Capital (CBC) backed a Series C in 2013.
Xiao-I secured more than CNY 100m (USD 14.6m) in a Series E in 2015 featuring Huatai Securities, BlueFocus Communication Group, and Everbright Qingdao New Energy Fund. Two years later, it raised a CNY 263m round led by Paradise Silicon Valley. Other backers include Zunrun Capital, Shanghai Philovirtus Investment, WaterStar Capital, and Yanyuan Capital Group.
The company originally developed a chatbot under the Xiao-I robot brand for C2C customers. In 2009, it transitioned to B2B. Gradually, it built out artificial intelligence (AI) capabilities and a significant product pipeline across various domains. Focus areas include smart cities, software, and architectural design.
In addition to chatbots, the product suite spans infrastructure, natural language processing, speech processing, computer vision, data intelligence, text-to-speech products, and the metaverse. There are 277 R&D personnel, accounting for about 63% of overall staff, according to a prospectus.
Revenue is mainly generated from the sale of software products and services, as well as maintenance and support services.
Revenue rose from USD 13.8m in 2020 to USD 32.5m the following year. The software product contribution rose 110% year-on-year in 2021, primarily because of two contracts to provide smart graphic review software. Revenue came to USD 12.9m in the first six months of 2022.
The company swung from a net loss of USD 7.1m in 2020 to a net profit of USD 3.4m in 2021. However, negative cash flow from operations widened from USD 3.5m to USD 11.9m. For the first six months of 2022, net profit came to USD 600,000 and negative cash flow from operations was USD 6.8m.
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