Today, a doctor from Hunan rang the IPO bell.

The road is long and arduous.

A major IPO has been born.

Investment community - IPO news every day, today (April 24th), DuerOS officially landed on the Hong Kong Stock Exchange, becoming the "first stock of AIGC". The IPO issue price this time is 3.8 Hong Kong dollars per share, with an issue market value of about 5.6 billion Hong Kong dollars, but there was not much suspense, and it still opened at a discount.

Looking back, DuerOS can be considered an ancient Chinese AI unicorn - in 2012, Li Zhifei resigned from Google Research Institute and returned to China to start a business in the field of voice interaction. During this period, DuerOS once became a star project in the venture capital circle with multiple rounds of financing, and also experienced the ups and downs of the domestic AI industry. Until the large-scale model became popular, DuerOS once again became active in everyone's sight and quickly completed the IPO.

The market value is not ideal, but it still completed the listing. Looking ahead, there are still many AI unicorns lining up to go public in Hong Kong behind DuerOS.

The story of DuerOS began with Li Zhifei.

Born in 1980, Li Zhifei, a native of Hunan, dreamed of becoming a scientist when he was young. In his later years of study, he successively obtained a bachelor's degree in thermal engineering from Nanjing University of Science and Technology and a master's degree in computer application technology from Nanjing University of Aeronautics and Astronautics. In 2004, Li Zhifei came to the United States to pursue a doctoral degree in the computer department at Johns Hopkins University.

After graduation, Li Zhifei entered Google headquarters to engage in research and development of machine translation. In 2012, Siri was released, and voice assistants began to be known to the public. Li Zhifei saw the opportunity and decided to resign from his high-paying job and start a business in China.

The first meeting left a deep impression of a scientist on Fang Ai, a partner of ZhenFund. At that time, Li Zhifei had neither a team nor a product, but with the identity of "the first scientist from Google Research Institute to start a business in China", he impressed Sequoia China and ZhenFund with a simple demo and obtained several million yuan in angel round financing.

Subsequent financing came one after another. In 2013, Wang Qiong, a partner of SIG, met Li Zhifei, and the two sides finalized the investment after only two meetings. In 2015, Li Zhifei also obtained tens of millions of dollars in Series C financing from his former employer Google.

What caused a sensation was in April 2017, when DuerOS announced the exclusive $180 million Series D financing from Volkswagen Group (China). At this time, DuerOS completed five rounds of investment, with a total financing of over $250 million, and the post-investment valuation once exceeded $1 billion, making it one of the highest-valued AI startups in China at that time.

However, the AI financing environment quickly changed. After 2017, DuerOS never announced new financing. At the same time, on the product side, DuerOS also experienced fierce competition from industry giants. For example, in the smart speaker race, DuerOS confronted giants such as Xiaomi, Baidu, and Huawei.

For some time, Li Zhifei and DuerOS disappeared from the public's view. It wasn't until the end of 2022, when ChatGPT emerged, that Li Zhifei decided to lead DuerOS to go all in on AI large models. Making a long-awaited appearance, he emotionally told the media that this would be the "last time All in" in his entrepreneurial journey.

Catching the wave, DuerOS introduced Zhongguancun International and E-town Capital as cornerstone investors, both of which are Beijing state-owned platforms. The announcement shows that Zhongguancun International will subscribe for $8 million, about 62.6 million Hong Kong dollars; E-town Capital will subscribe for 30 million yuan, about 32.4 million Hong Kong dollars.

Having experienced overnight fame and being ignored, today Li Zhifei finally brought DuerOS to the listing stage. "We have witnessed the development and growth of DuerOS." Zheng Qingsheng, a partner of Sequoia China and one of the angel investors, summarized that the successful listing this time is the result of Li Zhifei and the founding team's continuous innovation and perseverance.

A major model IPO is born, how promising is it?

How did DuerOS support an IPO?

According to the prospectus, DuerOS is positioned as an AI company with generative AI and voice interaction technology as its core business. Currently, DuerOS has two main business lines: AI software solutions and smart devices.

First, in terms of AI software solutions, DuerOS has launched the AIGC full-stack solution for content creators, including the AI dubbing assistant "Magic Sound Studio" and the overseas version "DupDub", the AI digital person "Wonderful Yuan" for virtual live broadcasting, and the short video AI generation platform "Yuan Chuang Island".

As for the enterprise side, DuerOS provides AI software solutions "Wonderful Questions" for the automotive, financial, TMT, and other industries, providing AI voice interaction solutions for scenarios such as in-vehicle, AI anti-fraud, and intelligent customer service.

The prospectus disclosed a set of data: since 2020, DuerOS has more than 10 million AIGC solution users worldwide, with over 865,000 paid AIGC users since the launch of AIGC solutions, generating over 1 million payments.

The prospectus shows that from 2021 to 2023, the revenue of Didi Chuxing was 397 million yuan, 502 million yuan, and 507 million yuan, with gross profits of 149 million yuan, 336 million yuan, and 326 million yuan, and gross profit margins of 37.5%, 67.2%, and 64.3% respectively. Despite a decrease in revenue growth rate from 2022 to 2023, the corresponding gross profits and gross profit margins for those years still remain at a relatively high level.

Surprisingly, Didi Chuxing achieved a turnaround in 2022, with adjusted net profits for 2021-2023 (excluding changes in the book value of redeemable preferred stock and common stock) being -73 million yuan, 109 million yuan, and 18 million yuan respectively. It can be said that Didi Chuxing may be the only AIGC company to achieve profitability.

This is thanks to the AI business of AskAsk, in the past three years, the AI business revenue of the company has increased from 15% to 67.7%, and the revenue has grown from 0.6 billion yuan in 2021 to 3.43 billion yuan in 2023, with a compound annual growth rate of 140%, surpassing the previous largest revenue AIOT, becoming the pillar industry of AskAsk.

Among them, the revenue of the AIGC solution was 6.822 million yuan, 39.857 million yuan, and 118 million yuan in 2021-2023, with a compound annual growth rate of over 300%.

But this growth trend has slowed down in 2023. The report shows that in 2023, the company's overall revenue increased by only 7 million yuan compared to 2022, but the gross profit decreased by nearly 10 million yuan, and the gross profit margin decreased from 67.2% to 64.3%. The reason behind this is the decrease in revenue from the top clients of the AI enterprise solution in the AI business.

Among them, Company A, an affiliated company of the automotive industry, is the largest client of AskAsk's enterprise business in recent years, contributing 42.6% and 27.4% of the revenue in the past two years, with a gross profit margin of over 90%. The reduction in demand from this client will seriously affect the revenue and profit of AskAsk. Looking at the revenue structure of AskAsk, the top five clients account for about 50% of the revenue.

In any case, the Hong Kong IPO at this time has added confidence to AskAsk. It is reported that the fundraising scale of this IPO is 360 million to 400 million Hong Kong dollars, most of which will be used to continue to deepen AIGC.

This year, AI unicorns are queuing for IPO

Through AskAsk, we can see a long line of AI unicorns in front of the Hong Kong Stock Exchange.

The latest to break through is Horizon Robotics, which is expected to become the largest IPO in Hong Kong this year. The company is led by Yu Kai, a post-75 entrepreneur who graduated from Nanjing University and later obtained a Ph.D. from the University of Munich. He left Baidu in 2015 to found Horizon Robotics. Since its establishment, Horizon Robotics has raised at least 11 rounds of financing, totaling 17 billion yuan, with a valuation of over 60 billion yuan.

Last month, the Hong Kong Stock Exchange welcomed three AI unicorns at once—

Among them, iFlytek, known as the "first stock of AI voice," restarted the process of listing on the Hong Kong Stock Exchange, with China International Capital Corporation and Haitong International as joint sponsors. Established in 2012, iFlytek is an early entrant in the AI field. It has completed 10 rounds of financing, and after a round of financing last May, its valuation approached 9 billion yuan.

AI pharmaceutical giant Infervision also resubmitted its listing application to the Hong Kong Stock Exchange. The prospectus shows that Infervision has completed 7 rounds of financing, with the latest round taking place in August 2022, led by Prosperity7 Ventures, a venture capital fund under Saudi Aramco. After this round of financing, Infervision's valuation reached 6.5 billion yuan.

Looking back, at the end of last year, Horizon Robotics submitted its listing application to the Hong Kong Stock Exchange. It is an innovative research and development platform powered by artificial intelligence and driven by robots. Shareholders include Sequoia China, Google, Tencent, and China Life.

Looking around, according to incomplete statistics, there are currently about 30 AI companies waiting in line, except for companies that have passed the hearing and those whose applications have failed.

"Most AI companies want to capture the B-end business, and being a listed company is undoubtedly the best business card." A person in the AI industry analyzed why AI companies are collectively rushing to IPO. In addition to the blessing of identity, the AI industry has high research and development investment and also needs to raise funds through IPO.

Despite the excitement of AI going public, the reality is that the Hong Kong stock issuance environment is well known, and it is often difficult to obtain high valuations. Even the "first stock of AIGC" AskAsk, which was oversubscribed before listing, is finding it difficult to escape the fate of breaking.

This scene leaves people in contemplation.