The four AI dragons have different destinies. Yitu Technology, which was originally at the same starting line as Shangtang, Megvii, and Yuncong, is now facing the embarrassing situation of breaking the capital market.
On July 2, Yitu Technology took the initiative to “withdraw” the A-share IPO on the Sci-tech Innovation Board, temporarily withdrawing from the “AI First Share” competition sequence. However, on July 20th, Yuncong Technology successfully passed the Science and Technology Innovation Board. In addition, Megvii Technology also moved to IPO on the Science and Technology Innovation Board after hitting a wall on the Hong Kong Stock Exchange. SenseTime also clarified its A+H IPO plan on the Science and Technology Innovation Board + Hong Kong Stock Exchange in June.
Yitu Technology, which was the most promising to hit the leader, is now stuck at the door of the capital market. How can the difficult situation of large investment and difficult profitability be removed?
In fact, Yitu Technology has successively seized face recognition, AI chips and AI medical outlets for business breakthroughs, but it has always been difficult to form competitive advantages and commercial barriers. However, the sequelae of insufficient hematopoietic capacity and high financial pressure have made it dependent on capital blood transfusion for a long time. When it comes to the critical stage of market competition, it is slow step by step.
Yitu Technology’s commercialization has been frustrated many times, and it has also fallen into a storm of salary cuts and layoffs. At this time, the termination of its IPO may completely push it into the “darkest moment.”
“Blood tonic” blocked at both ends
In fact, during the IPO preparation period of the past 8 months, Yitu Technology has “staggered” twice. Who knows that the twists and turns have finally become the voluntary withdrawal of the IPO application.
On November 4, 2020, the Shanghai Stock Exchange accepted Yitu Technology’s IPO application and entered the inquiry stage on December 1, 2020. However, the subsequent process was quite unsatisfactory, and it was suspended twice in the first half of this year.
On March 11 this year, Yitu Technology and its sponsor voluntarily requested that the review be suspended, and the review was resumed three months later; on June 11, Yitu Technology’s IPO was suspended again. The two suspensions were related to the red-chip structure and the expiration of the financial information.
For the AI track that continues to burn money, smooth financing is the key to ensuring the survival of the company. Players who fail to go public need to continue to seek external financing, and this is destined to be an increasingly difficult road.
AI companies have long been retreated from their gorgeous veil, and they have become a hot potato nowadays from the darling of capital. Questions about high valuations have made financing embarrassing and cold. Kai-Fu Lee, the founder of Innovation Works, said bluntly, “Many AI companies have cut investors’ leek.”
Before 2019, the artificial intelligence industry was still widely sought after by capital, but after that, the “landlord’s home” has no more food, and the financing amount of AI companies has dropped considerably, and it is no longer easy to obtain financing since 2020. Such a financing curve is also very obvious in Yitu Technology.
From the perspective of its financing history, there have been 10 rounds of financing since September 2012. Among them, two financings received 300 million U.S. dollars in 2018, and the financing amount completed in March last year was reduced to 30 million U.S. dollars. The latest round of financing stays in June 2020, and the amount has not been disclosed. That is to say, Yitu Technology has not been financing for more than a year, so listing “blood supplement” has become its best hope for sustaining.
Relevant data shows that Yitu Technology’s valuation has reached 14 billion yuan in 2020, and an excessively high valuation may no longer be favored by capital. From 2012 to the present, capital has been running for ten years, and it is time to withdraw and seek income. In the past, high valuations gave Yitu Technology a halo of glory, but now it has become the biggest obstacle to continued financing, like a causal cycle.
I missed the “window period” for the IPO. According to the current tightening sci-tech innovation board listing environment, Yitu Technology may not be able to apply for an IPO again in the short term; if it switches to Hong Kong stocks, it needs to prepare application materials again, and the threshold for the Hong Kong stock market is not low. ; Or it can only continue to seek capital blood transfusion in the primary market, but its valuation level has been pushed to the top of the mountain, who is willing to take over this hot yam at this time?
Yitu Technology originally wanted to use this sci-tech innovation board to raise 7.5 billion yuan, of which 2.238 billion yuan will be used to supplement working capital. As of the end of June 2020, the monetary funds on Yitu Technology’s account were approximately 1.558 billion yuan, but it should be known that from 2017 to the first half of 2020, Yitu Technology had a cumulative loss of nearly 7.3 billion yuan, excluding the increase in the fair value of preferred stocks. As a result, the main business is still losing money.
“When a company’s book funds are not enough to support it for a year, you don’t know how panicked it is.” Some investors said bluntly.
The uncertain outlook has caused turbulence within the company. In the first half of this year, news about Yitu Technology’s salary cuts and layoffs came from time to time. Now the total number of employees has been reduced to about 500.
According to media reports, Yitu Technology, as a key medical business department, has become the hardest hit area for layoffs. Yitu Technology’s chief technology officer and senior AI da Niu Yan Shuicheng resigned after only one and a half years in office.
Financing channels are blocked, internal and external difficulties, Yitu Technology has entered the darkest moment, if the risk cannot be properly resolved, falling behind from the “AI Four Dragons” will also be a high probability event.
“Hematopoiesis” on all sides
More terrible than poor financing is the insufficiency of its own “hematopoiesis” ability.
From the very beginning, Yitu Technology has been pursuing one after another in business, but it has always been difficult to find areas with absolute advantages, and its commercial value cannot be fully demonstrated.
As a kind of underlying technology, after the initial excitement in the industry, the industry began to place more emphasis on the ability of AI technology to land in specific business scenarios. Yitu Technology has tried its best on this road.
Choosing the field of computer vision and making a breakthrough in the field of security was the unanimous choice of the four little dragons, but they did not make it to the forefront. Hikvision has been ranked No. 1 in the video surveillance industry for eight consecutive years, and is a leading enterprise in the field of intelligent security. At the same time, Internet giants such as Huawei and Baidu have also entered the smart security track one after another.
For Yitu Technology, this business is not easy to do. The main customers are government agencies and public institutions at all levels. Due to the adoption of centralized procurement and budget management systems for such customers, the project delivery and settlement process is long, which results in a large collection cycle, long accounts receivable, and liquidity of funds. high pressure.
In addition, face recognition also faces ethical issues. At the March 15th party this year, facial recognition cameras installed in shopping malls and other places captured personal information without the knowledge of customers, causing public controversy. In recent years, the abuse of face recognition technology and information security issues have aroused public concern from time to time. Obviously, the ethical and moral protection mechanism for the healthy development of artificial intelligence is not yet complete. This is also a major concern for Yitu Technology’s business development.
Subsequently, AI companies are trying to find their own unique positioning, seeking specific scenarios, and forming differentiated competition. SenseTime is positioned as an AI algorithm provider, Megvii devotes itself to the Internet of Things, and Cloud is positioned as a human-machine collaboration solution provider.
Yitu chose the AI chip + computing power manufacturer positioning. Although it claims to be one of the few artificial intelligence chip startups that has achieved product tapeout and large-scale applications, its product “search” chips are not self-developed by Yitu Technology. Rather, it originated from Yizhi Electronics, which was originally acquired, and the Shanghai Stock Exchange also asked about this.
Yitu Technology is responsible for formulating chip specifications, completing chip design and verification, etc. Afterwards, manufacturing, packaging and testing are completed through foundry methods. Among the specific products, only the original stone series servers contain “search” chips. As of June 2020, only 955 pieces of this server have been sold.
In the field of AI chips, companies have already taken the lead. Cambrian has already landed in the capital market by virtue of its first-mover advantage. At present, it has entered the field of in-vehicle smart chips, and its wholly-owned subsidiary, Xingge Technology, has received investment from Weilai, SAIC and CATL.
In addition, the differentiation of Yitu Technology lies in the medical industry. As early as the second half of 2016, Yitu Technology announced its entry into the medical market, but the advancement process was not satisfactory.
The data shows that from 2018 to the first half of 2020, Yitu Technology achieved revenues of 99,100 yuan, 5.5973 million yuan and 5.6267 million yuan in the medical and health field. Obviously, the income scale is still small, and it has not yet achieved large-scale commercial use in the medical field.
According to recent media reports, Yitu Medical, a subsidiary of Yitu Technology, has cancelled branches in Wuhan, Xi’an, Chengdu and other places, and related medical procurement departments and sales departments have been disbanded.
In the specific landing, pure technology is not a panacea, and the complexity of business is not easily solved by AI technology. The compatibility of software and hardware systems, the standardization of business scenarios, and the privacy and security of data are all standing tests. .
At present, AI technology is currently only available in the fields of security, finance and other areas with higher digitization and standardization. It has carried the expectations of the industry for many years, but it has not brought more pleasant commercialization breakthroughs. This is also the reason why capital has become more rational about AI.
The main purpose of AI companies getting together to go public is to raise funds to achieve product commercialization as soon as possible, and then gain a competitive advantage. Going public does not mean “graduation”. Only when they come up with actual commercialization plans as soon as possible and move toward profitability can they match their own Valuation.
Yitu Technology has been staggering all the way to pursue the trend, but it has always been difficult to find a business model to settle down. How to prove its commercial value more pragmatically, and achieve endogenous growth and expansion, is the threshold that Yitu Technology must pass.
Market rivals
With first-mover advantage and high investment in scientific research, AI companies have brought technical barriers to themselves, and their competitive advantages are being broken step by step.
It is not only technological innovation companies such as the “Four Little Dragons” that are focusing on the AI field, but also a group of powerful technology giants and traditional companies.
What’s more, competition in the field of AI technology is global. International giants such as Google and NVIDIA have deployed artificial intelligence technology research and development. Compared with giants, Yitu’s financial strength, technical capabilities and market capabilities are almost incomparable.
In China, Baidu, Meituan, ByteDance and other vendors have accumulated a lot of AI technologies, and the research and development based on landing scenarios has unparalleled operational advantages.
For example, Meituan is exploring the application of AI in food delivery and other fields relying on its huge distribution strength; ByteDance’s recommendation information platform Today Toutiao has long applied artificial intelligence technology to information distribution on a large scale; Baidu is in autonomous driving There has been investment over the years, and it has been put into practice, and the response has been enthusiastic.
AI technology alone can no longer impress customers. Now it pays attention to application scenarios and landing capabilities. In this regard, Yitu Technology is naturally inferior to Internet technology giants. If only technology does not understand business, it is difficult to impress customers, and it is often difficult to obtain bargaining. Rights and pricing rights.
For technology companies, how to translate their own technology to customers so that they truly understand the problems that technology can solve is a major problem in business operations. The development of the artificial intelligence industry can empower business with new technologies, but it is still unclear whether the solutions formed by new algorithms and data can be applied in new industries on a large scale.
Therefore, deriving technology from the business is a good way to solve this problem, which is very different from the development path of AI companies such as Yitu Technology.
The field of computer vision has also evolved into the Red Sea early. From 2017 to 2019, the market growth rate exceeded 20%. In February 2021, my country’s various types of computer vision companies exceeded 4,000.
It is foreseeable that Internet giants that can more smoothly cut into specific business scenarios are moving closer to the center of the AI stage, and AI companies that lack their own hematopoietic ability, brand effect and financial strength are slightly weaker can not enjoy the spotlight exclusively.
And Yitu Technology is not the king among the four little dragons. In 2019, the revenues of Megvii, Yuncong and Yitu were 1.26 billion yuan, 807 million yuan and 717 million yuan, respectively, making Yitu Technology the bottom; Yitu Technology’s revenue was 3.81 billion in the first half of 2020. 100 million yuan, a small year-on-year increase, while Megvii Technology has achieved 716 million yuan in the first nine months.
The era of relying on algorithms to conquer the world has passed, and AI companies no longer have the advantage under the double-team of Internet giants. However, Yitu Technology, which is not outstanding in strength, was frustrated in its listing and is even more disadvantaged. Whether it can cross this hurdle and get out of the darkest moment may determine the company’s survival.
The four AI dragons have different destinies. Yitu Technology, which was originally at the same starting line as Shangtang, Megvii, and Yuncong, is now facing the embarrassing situation of breaking the capital market.
On July 2, Yitu Technology took the initiative to “withdraw” the A-share IPO on the Sci-tech Innovation Board, temporarily withdrawing from the “AI First Share” competition sequence. However, on July 20th, Yuncong Technology successfully passed the Science and Technology Innovation Board. In addition, Megvii Technology also moved to IPO on the Science and Technology Innovation Board after hitting a wall on the Hong Kong Stock Exchange. SenseTime also clarified its A+H IPO plan on the Science and Technology Innovation Board + Hong Kong Stock Exchange in June.
Yitu Technology, which was the most promising to hit the leader, is now stuck at the door of the capital market. How can the difficult situation of large investment and difficult profitability be removed?
In fact, Yitu Technology has successively seized face recognition, AI chips and AI medical outlets for business breakthroughs, but it has always been difficult to form competitive advantages and commercial barriers. However, the sequelae of insufficient hematopoietic capacity and high financial pressure have made it dependent on capital blood transfusion for a long time. When it comes to the critical stage of market competition, it is slow step by step.
Yitu Technology’s commercialization has been frustrated many times, and it has also fallen into a storm of salary cuts and layoffs. At this time, the termination of its IPO may completely push it into the “darkest moment.”
“Blood tonic” blocked at both ends
In fact, during the IPO preparation period of the past 8 months, Yitu Technology has “staggered” twice. Who knows that the twists and turns have finally become the voluntary withdrawal of the IPO application.
On November 4, 2020, the Shanghai Stock Exchange accepted Yitu Technology’s IPO application and entered the inquiry stage on December 1, 2020. However, the subsequent process was quite unsatisfactory, and it was suspended twice in the first half of this year.
On March 11 this year, Yitu Technology and its sponsor voluntarily requested that the review be suspended, and the review was resumed three months later; on June 11, Yitu Technology’s IPO was suspended again. The two suspensions were related to the red-chip structure and the expiration of the financial information.
For the AI track that continues to burn money, smooth financing is the key to ensuring the survival of the company. Players who fail to go public need to continue to seek external financing, and this is destined to be an increasingly difficult road.
AI companies have long been retreated from their gorgeous veil, and they have become a hot potato nowadays from the darling of capital. Questions about high valuations have made financing embarrassing and cold. Kai-Fu Lee, the founder of Innovation Works, said bluntly, “Many AI companies have cut investors’ leek.”
Before 2019, the artificial intelligence industry was still widely sought after by capital, but after that, the “landlord’s home” has no more food, and the financing amount of AI companies has dropped considerably, and it is no longer easy to obtain financing since 2020. Such a financing curve is also very obvious in Yitu Technology.
From the perspective of its financing history, there have been 10 rounds of financing since September 2012. Among them, two financings received 300 million U.S. dollars in 2018, and the financing amount completed in March last year was reduced to 30 million U.S. dollars. The latest round of financing stays in June 2020, and the amount has not been disclosed. That is to say, Yitu Technology has not been financing for more than a year, so listing “blood supplement” has become its best hope for sustaining.
Relevant data shows that Yitu Technology’s valuation has reached 14 billion yuan in 2020, and an excessively high valuation may no longer be favored by capital. From 2012 to the present, capital has been running for ten years, and it is time to withdraw and seek income. In the past, high valuations gave Yitu Technology a halo of glory, but now it has become the biggest obstacle to continued financing, like a causal cycle.
I missed the “window period” for the IPO. According to the current tightening sci-tech innovation board listing environment, Yitu Technology may not be able to apply for an IPO again in the short term; if it switches to Hong Kong stocks, it needs to prepare application materials again, and the threshold for the Hong Kong stock market is not low. ; Or it can only continue to seek capital blood transfusion in the primary market, but its valuation level has been pushed to the top of the mountain, who is willing to take over this hot yam at this time?
Yitu Technology originally wanted to use this sci-tech innovation board to raise 7.5 billion yuan, of which 2.238 billion yuan will be used to supplement working capital. As of the end of June 2020, the monetary funds on Yitu Technology’s account were approximately 1.558 billion yuan, but it should be known that from 2017 to the first half of 2020, Yitu Technology had a cumulative loss of nearly 7.3 billion yuan, excluding the increase in the fair value of preferred stocks. As a result, the main business is still losing money.
“When a company’s book funds are not enough to support it for a year, you don’t know how panicked it is.” Some investors said bluntly.
The uncertain outlook has caused turbulence within the company. In the first half of this year, news about Yitu Technology’s salary cuts and layoffs came from time to time. Now the total number of employees has been reduced to about 500.
According to media reports, Yitu Technology, as a key medical business department, has become the hardest hit area for layoffs. Yitu Technology’s chief technology officer and senior AI da Niu Yan Shuicheng resigned after only one and a half years in office.
Financing channels are blocked, internal and external difficulties, Yitu Technology has entered the darkest moment, if the risk cannot be properly resolved, falling behind from the “AI Four Dragons” will also be a high probability event.
“Hematopoiesis” on all sides
More terrible than poor financing is the insufficiency of its own “hematopoiesis” ability.
From the very beginning, Yitu Technology has been pursuing one after another in business, but it has always been difficult to find areas with absolute advantages, and its commercial value cannot be fully demonstrated.
As a kind of underlying technology, after the initial excitement in the industry, the industry began to place more emphasis on the ability of AI technology to land in specific business scenarios. Yitu Technology has tried its best on this road.
Choosing the field of computer vision and making a breakthrough in the field of security was the unanimous choice of the four little dragons, but they did not make it to the forefront. Hikvision has been ranked No. 1 in the video surveillance industry for eight consecutive years, and is a leading enterprise in the field of intelligent security. At the same time, Internet giants such as Huawei and Baidu have also entered the smart security track one after another.
For Yitu Technology, this business is not easy to do. The main customers are government agencies and public institutions at all levels. Due to the adoption of centralized procurement and budget management systems for such customers, the project delivery and settlement process is long, which results in a large collection cycle, long accounts receivable, and liquidity of funds. high pressure.
In addition, face recognition also faces ethical issues. At the March 15th party this year, facial recognition cameras installed in shopping malls and other places captured personal information without the knowledge of customers, causing public controversy. In recent years, the abuse of face recognition technology and information security issues have aroused public concern from time to time. Obviously, the ethical and moral protection mechanism for the healthy development of artificial intelligence is not yet complete. This is also a major concern for Yitu Technology’s business development.
Subsequently, AI companies are trying to find their own unique positioning, seeking specific scenarios, and forming differentiated competition. SenseTime is positioned as an AI algorithm provider, Megvii devotes itself to the Internet of Things, and Cloud is positioned as a human-machine collaboration solution provider.
Yitu chose the AI chip + computing power manufacturer positioning. Although it claims to be one of the few artificial intelligence chip startups that has achieved product tapeout and large-scale applications, its product “search” chips are not self-developed by Yitu Technology. Rather, it originated from Yizhi Electronics, which was originally acquired, and the Shanghai Stock Exchange also asked about this.
Yitu Technology is responsible for formulating chip specifications, completing chip design and verification, etc. Afterwards, manufacturing, packaging and testing are completed through foundry methods. Among the specific products, only the original stone series servers contain “search” chips. As of June 2020, only 955 pieces of this server have been sold.
In the field of AI chips, companies have already taken the lead. Cambrian has already landed in the capital market by virtue of its first-mover advantage. At present, it has entered the field of in-vehicle smart chips, and its wholly-owned subsidiary, Xingge Technology, has received investment from Weilai, SAIC and CATL.
In addition, the differentiation of Yitu Technology lies in the medical industry. As early as the second half of 2016, Yitu Technology announced its entry into the medical market, but the advancement process was not satisfactory.
The data shows that from 2018 to the first half of 2020, Yitu Technology achieved revenues of 99,100 yuan, 5.5973 million yuan and 5.6267 million yuan in the medical and health field. Obviously, the income scale is still small, and it has not yet achieved large-scale commercial use in the medical field.
According to recent media reports, Yitu Medical, a subsidiary of Yitu Technology, has cancelled branches in Wuhan, Xi’an, Chengdu and other places, and related medical procurement departments and sales departments have been disbanded.
In the specific landing, pure technology is not a panacea, and the complexity of business is not easily solved by AI technology. The compatibility of software and hardware systems, the standardization of business scenarios, and the privacy and security of data are all standing tests. .
At present, AI technology is currently only available in the fields of security, finance and other areas with higher digitization and standardization. It has carried the expectations of the industry for many years, but it has not brought more pleasant commercialization breakthroughs. This is also the reason why capital has become more rational about AI.
The main purpose of AI companies getting together to go public is to raise funds to achieve product commercialization as soon as possible, and then gain a competitive advantage. Going public does not mean “graduation”. Only when they come up with actual commercialization plans as soon as possible and move toward profitability can they match their own Valuation.
Yitu Technology has been staggering all the way to pursue the trend, but it has always been difficult to find a business model to settle down. How to prove its commercial value more pragmatically, and achieve endogenous growth and expansion, is the threshold that Yitu Technology must pass.
Market rivals
With first-mover advantage and high investment in scientific research, AI companies have brought technical barriers to themselves, and their competitive advantages are being broken step by step.
It is not only technological innovation companies such as the “Four Little Dragons” that are focusing on the AI field, but also a group of powerful technology giants and traditional companies.
What’s more, competition in the field of AI technology is global. International giants such as Google and NVIDIA have deployed artificial intelligence technology research and development. Compared with giants, Yitu’s financial strength, technical capabilities and market capabilities are almost incomparable.
In China, Baidu, Meituan, ByteDance and other vendors have accumulated a lot of AI technologies, and the research and development based on landing scenarios has unparalleled operational advantages.
For example, Meituan is exploring the application of AI in food delivery and other fields relying on its huge distribution strength; ByteDance’s recommendation information platform Today Toutiao has long applied artificial intelligence technology to information distribution on a large scale; Baidu is in autonomous driving There has been investment over the years, and it has been put into practice, and the response has been enthusiastic.
AI technology alone can no longer impress customers. Now it pays attention to application scenarios and landing capabilities. In this regard, Yitu Technology is naturally inferior to Internet technology giants. If only technology does not understand business, it is difficult to impress customers, and it is often difficult to obtain bargaining. Rights and pricing rights.
For technology companies, how to translate their own technology to customers so that they truly understand the problems that technology can solve is a major problem in business operations. The development of the artificial intelligence industry can empower business with new technologies, but it is still unclear whether the solutions formed by new algorithms and data can be applied in new industries on a large scale.
Therefore, deriving technology from the business is a good way to solve this problem, which is very different from the development path of AI companies such as Yitu Technology.
The field of computer vision has also evolved into the Red Sea early. From 2017 to 2019, the market growth rate exceeded 20%. In February 2021, my country’s various types of computer vision companies exceeded 4,000.
It is foreseeable that Internet giants that can more smoothly cut into specific business scenarios are moving closer to the center of the AI stage, and AI companies that lack their own hematopoietic ability, brand effect and financial strength are slightly weaker can not enjoy the spotlight exclusively.
And Yitu Technology is not the king among the four little dragons. In 2019, the revenues of Megvii, Yuncong and Yitu were 1.26 billion yuan, 807 million yuan and 717 million yuan, respectively, making Yitu Technology the bottom; Yitu Technology’s revenue was 3.81 billion in the first half of 2020. 100 million yuan, a small year-on-year increase, while Megvii Technology has achieved 716 million yuan in the first nine months.
The era of relying on algorithms to conquer the world has passed, and AI companies no longer have the advantage under the double-team of Internet giants. However, Yitu Technology, which is not outstanding in strength, was frustrated in its listing and is even more disadvantaged. Whether it can cross this hurdle and get out of the darkest moment may determine the company’s survival.
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