Leidi.com Lei Jianping September 18
AI company 4Paradigm (stock code: "6682.HK") launched a road show today. The offering range is from HK$55.6 to HK$61.16, with 18.4 million shares issued, and the maximum total amount raised is HK$1.1 billion (approximately 1 billion yuan).
The cornerstone investors of Fourth Paradigm’s listing include Xinhua Capital Management, Beijing Zhongguancun, and Montage Holdings.
Among them, Xinhua Capital subscribed for HK$365 million, Beijing Zhongguancun subscribed for 290 million yuan, and Montage Holdings subscribed for US$10 million. The above three investors subscribed for a total of US$96.8 million.
4Paradigm is expected to be listed on the main board of the Hong Kong Stock Exchange on September 28, 2023.
Annual revenue of 3.1 billion, adjusted loss of 500 million
According to reports, Fourth Paradigm was established in September 2014 and is an enterprise in the field of enterprise-level artificial intelligence.
The prospectus shows that Fourth Paradigm’s revenue in 2020, 2021, and 2022 will be 942 million yuan, 2.018 billion yuan, and 3.083 billion yuan respectively; gross profits will be 429 million yuan, 953 million yuan, and 1.487 billion yuan respectively; research and development expenses will be respectively 566 million yuan, 1.25 billion yuan, 1.65 billion yuan.
Fourth Paradigm's operating losses in 2020, 2021 and 2022 were 560 million yuan, 1.173 billion yuan and 1.026 billion yuan respectively; losses during the period were 750 million yuan, 1.8 billion yuan and 1.653 billion yuan respectively.
Fourth Paradigm’s adjusted losses in 2020, 2021 and 2022 are 390 million yuan, 559 million yuan and 504 million yuan respectively.
Fourth Paradigm's revenue in the first quarter of 2023 was 644 million yuan, compared with 482 million yuan in the same period last year; operating loss was 125 million yuan, compared with 123 million yuan in the same period last year; loss during the period was 304 million yuan, compared with 482 million yuan in the same period last year. The loss for the period in the same period last year was 268 million yuan; the adjusted loss in the first quarter of 2023 was 65.13 million yuan
Fourth Paradigm's largest source of revenue in 2022 comes from the energy and power sector, with revenue of 627 million yuan, accounting for 20.3% of revenue; revenue from the financial sector is 520 million yuan, accounting for 16.9% of revenue;
Fourth Paradigm's revenue from the transportation sector in 2022 will be 405 million yuan, accounting for 13.1% of revenue. Before 2022, Fourth Paradigm's revenue from this aspect will be 0; revenue from the telecommunications sector will be 328 million yuan, accounting for 13.1% of revenue. is 10.7%; revenue from the technology sector is 300 million yuan, accounting for 9.7% of revenue; revenue from the manufacturing sector is 200 million yuan, accounting for 6.5% of revenue.
Fourth Paradigm's largest revenue source in the first quarter of 2023 is transportation, accounting for 30% of revenue; revenue from the financial version is 130 million yuan, accounting for 19.8%, and revenue from the energy and power sector is 73.2 million Yuan, the proportion dropped to 11.4%.
As of March 31, 2023, 4Paradigm held cash and cash equivalents of 1.425 billion yuan.
Released large model "Shishuo 3.0" and proposed AIGS strategy
On April 26, 2023, 4Paradigm demonstrated its large-scale model product "Shishuo 3.0" to the public for the first time, and proposed the AIGS strategy (AI-Generated Software) for the first time: reconstructing enterprise software with generative AI. Shishuo will be positioned as a new development platform based on multi-modal large models to improve the experience and development efficiency of enterprise software and realize "AIGS".
Dai Wenyuan, CEO of Fourth Paradigm, believes that to achieve AIGS, a large model does not necessarily need to be a generalist with extensive knowledge and a decathlon champion. What is more important is that the model has Copilot (co-pilot) and CoT (Chain of Thoughts, multi-step reasoning) ability.
"To transform enterprise software, large models cannot only have language capabilities. Shishuo 2.0 has added multimodality and Copilot, because the data in many enterprise software is multimodal, and Copilot can translate human instructions into calls. Which API in the background.
In the previously released demo of Shisuo 2.0, store employees initiate instructions to Shisuo through voice, text and other interactive methods. After Shisuo understands it, the networked store monitoring software calls up pictures of people in the kitchen without masks, and directly converts the pictures into conversations. Output to employees in the form of boxes.
The fourth paradigm summarizes the path of AIGS into three stages:
In the first stage, Copilot mobilizes different information, data, and applications to serve as an assistant to complete the user's instructions. It is equivalent to having a commander in all enterprise-level software systems. The commander listens to the user's instructions, such as "brighten the photo by 20%."
In the second stage, Copilot + the "knowledge base" based on enterprise rules, AI can do complex work with reference to the rules, further enriching the capabilities of the "dialog box". For example, after AI queries the "portrait beautification" knowledge base, it can perform steps to fix the photo to look good.
The third stage, Copilot+CoT (thinking chain). The usage behavior of the software system will eventually be learned by the large model, forming a thinking chain for AI in this field, which means that complex instructions such as "processing photos to make them look better" can be completed automatically by AI in steps.
The AIGS strategy refers to transforming enterprise software into a new interaction paradigm based on the Copilot+CoT capabilities behind large models, and continuously learning the use process of software on new interactions to form a "thinking chain" for domain software.
Ultimately, enterprise software development becomes more efficient as new forms of interaction emerge.
Shen Nanpeng no longer serves as a non-executive director
The executive directors of Fourth Paradigm are Dai Wenyuan, Chen Yuqiang, and Yu Zhonghao; the non-executive directors are Yang Qiang, Shen Nanpeng, Dou Shuai, and Zhang Jing; the independent non-executive directors are Li Jianbin, Liu Chijin, Dr. Hou Xiaodi, and Dr. Ni Mingxuan.
Comparing the updated prospectus of 4Paradigm in April 2023, it can be found that Sequoia China partner Shen Nanpeng no longer serves as a non-executive director of 4Paradigm.
Fourth Paradigm’s management includes Chairman and CEO Dai Wenyuan, Chief Research Scientist Chen Yuqiang, Chief Architect Hu Shiwei, Chief Scientist and Vice President Tu Weiwei, all of whom have worked at Baidu. Among them, Dai Wenyuan designed the commercial AI system-Baidu “Feng” Nest” system; the Fourth Paradigm was founded in 2014.
Pei Zuosi, President of 4Paradigm, joined in July 2019. Before joining 4Paradigm, Pei Zusi served as senior vice president of SAP China.
Sequoia and Boyu are major shareholders
Since its establishment, 4Paradigm has received financing many times, including:
In December 2018, 4Paradigm completed the C round of financing, with a financing amount of more than 1 billion yuan and a valuation of approximately US$1.2 billion. The investors were Agricultural Bank of China, Bank of Communications, and 4Paradigm’s original shareholders Industrial and Commercial Bank of China, Bank of China, and China China Construction Bank is one of the “Five Big Banks in China”.
In April 2020, 4Paradigm announced the completion of Series C+ financing. The total financing amount of Series C reached US$230 million, with a post-investment valuation of approximately US$2 billion. In this round of financing, new strategic shareholders including Cisco, CITIC Bank, and Lenovo were introduced, and Pine Capital and Cornerstone Capital joined as financial investors.
In January 2021, 4Paradigm announced the completion of Series D financing, with a financing amount of US$700 million. This round of financing was led by Primavera Capital, Boyu Capital, and Hopu Investment, and also introduced the National Manufacturing Transformation Fund, China Development Bank, Guoxin Guotong, Jiantou Huake, Xicheng Jinrui, CITIC Construction Investment, Haitong Securities, etc. Strategic shareholders, financial investment institutions such as Sequoia China, CITIC Private Equity Fund, Goldman Sachs, Jinyi Capital and FountainVest Capital.
Before the IPO, Dai Wenyuan himself and through his close contacts Wu Ming (Dai Wenyuan’s wife), Beijing Xinzhi, Paradigm Investment, Paradigm Yinyuan, Paradigm Chuqi and Paradigm Tianqin controlled 40.44% of the shares.
Among them, Dai Wenyuan directly holds 23.82% of the shares, Paradigm Investment holds 14.35%, Sequoia China's HongShan Venture holds 7.24%, Boyu Jingtai holds 3.17%, Guoxin TusHoldings 2.72%, and Sino One No. holds 2.71% of the shares, Pu Rui Tianjin holds 2.54%, Paradigm Yinyuan holds 2.27%, and YSC Investment I managed by Genesis Capital holds 2.21% (Tencent invests 55.6%, Genesis Capital invests 44.4%);
China-UAE Investment and Sequoia Hanchen each hold 1.9% of the shares, Nanjing Paradigm holds 1.79%, Beijing Innovation holds 1.6%, Zhuhai Hongmai and China Mobile Equity Fund hold 1.58% respectively, and Sinovation Fund III The shareholding is 1.45%;
China Development Bank Manufacturing Fund holds 1.43% of the shares, Sequoia Mingde holds 1.43%, Ruihui Haina holds 1.1%, Jiangsu Binquan and Panxin Shanghai hold 0.95% each, and China Mutual Capital One The shareholding is 0.93%, Sequoia Zhisheng holds 0.92%, Qingdao Chuangxin Venture Capital Enterprise (Limited Partnership) holds 0.85%, BoCom International Holdings Co., Ltd. holds 0.82%, and Zhuhai Xuren holds 0.79 %, Major Awesome holds 0.77%.
The following is the roadshow PPT (edited by Leidi.com):
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