China’s voice recognition champion iFlytek gets $407 million funding boost from state investors

18-Jul-2019 Intellasia | South China Morning Post | 6:02 AM Print This Post

iFlytek, China’s national champion in voice recognition, has raised 2.8 billion yuan (US$407 million) via a private placement that brought in money from a state-backed industry fund and several provincial government funds.

The Shenzhen-listed company will use the proceeds to bankroll research in open platforms for smart speech, so-called next generation cognitive technology, and service robots, it said in a stock exchange filing on Wednesday.

The placement has pulled in investors including Anhui Development Investment Company, Anhui Railway Development Fund, Anhui Smart Voice and Artificial Intelligence Venture Capital, as well as an investment fund for state-owned companies under government-controlled investment vehicle China Reform Holdings.

Founded in 1999 and headquartered in Hefei, the capital of the eastern Chinese province of Anhui, iFlytek has established itself as the country’s foremost developer of advanced speech recognition, speech evaluation and natural language processing technologies.

In 2017 the company was handpicked by the Chinese government to spearhead the country’s development in voice intelligence and take the lead in building an “open innovation platform”.

The firm’s AI speech open platform is expected to be the biggest beneficiary of the new funds as iFlytek intends to invest 2.05 billion yuan in that project, with 1.18 billion yuan the amount coming from proceeds of the private placement.

iFlytek’s focus on AI technology and its state support has put the company at the forefront of the tech war being waged between the US and China, with Washington deliberating whether to add iFlytek to a blacklist that would bar it from purchasing US components or software without US government approval, Bloomberg reported in May citing a person familiar with the matter.

“Huawei and iFlytek are very similar in DNA. Both are the kind of companies persistent enough to take 10 years to sharpen one sword,” Hu Yu, who takes the title of rotating president of iFlytek, said at an public event in May.

Huawei Technologies, China’s telecoms national champion, was put on the blacklist in May although US President Donald Trump softened that stance after talks with Xi Jinping at the G20 summit in June.

China Asset Management and Harvest Fund Management, the country’s two top mutual funds, also backed the iFlytek offering, according to the filing. The new investors have a one year lock up period and cannot sell their shares until July 18 next year.


Category: China

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