AI firm 4Paradigm tries for an IPO in Hong Kong, again

Business & Technology

4Paradigm, an artificial intelligence services firm, plans its second IPO in Hong Kong in six months. It may signal an end to China’s regulatory freeze.

Image via 4Paradigm

4Paradigm, an artificial intelligence services firm helping clients detect fraud, improve efficiency, and reduce risk, is planning an initial public offering in Hong Kong for a second time in six months.

    • The company submitted a Hong Kong IPO last August. After failing to pass the prospectus hearing within a 6-month timeframe, the initial attempt was invalidated.
    • 4Paradigm promises to improve workplace efficiency through the power of AI. The company’s overall mission is to accelerate the transformation process of traditional industries into next-gen tech.
    • According to the initial filing, 4Paradigm was unprofitable. In the first half of 2021, the company showed aggregate losses totalling almost 70 million yuan ($11 million). Most of the losses were spent on R&D. Nearly 75% of the total budget was used on product and tech development in the second quarter of 2021.

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The context: In the latest draft prospectus, 4Paradigm modified its customer base by including industries in finance, retail, manufacturing, energy and power, telecommunications and healthcare. 4Paradigm also updated its filing with co-sponsors including Goldman Sachs and the state-backed investment fund CICC.

  • The company’s clients include 55 firms in the Fortune 500. Overall corporate users of 4Paradigm’s services increased 82% year-on-year, totalling to 186.
  • The tech firm has won numerous awards. IDC, an international market analysis corporation, ranked 4Paradigm with the largest AI market revenue share in the machine learning category for 2021 – its fourth consecutive year.

The takeaway: Beijing’s latest regulatory crackdowns put a damper on tech-related IPOs. Yet things appear to be looking up: Last week, at least six Chinese companies filed listings in New York. 4Paradigm’s reattempt at listing in Hong Kong might suggest that the months-long regulatory freeze is ending – only time will tell.