Terminus Secures Strategic Investment Post D-Round Financing, Accelerating Listing Process

Source: 21st Century Business Herald

In April of this year, Terminus completed a RMB 2 billion D-round financing and is currently undergoing a new round of financing.

On the evening of August 29, listed company Microware announced that it has recently invested RMB 50 million in Terminus, an artificial intelligence Internet of Things (AIoT) company. Moving forward, Microwareaims to leverage this opportunity to enhance the development of its software and hardware products using AI technology, while achieving synergies between its IT and AI businesses to strengthen the group's competitiveness.

This investment follows Terminus's announcement of its completion of the RMB 2 billion D-round financing and marks the initiation of a new financing round, with Microware being one of several investors. In April, Terminus set a record for the largest D-round financing of the year, led by international capital firm AL Capital and domestic industry fund Yangming Equity Investment Fund, with participation from various new and existing shareholders, including investment platforms under the National Development and Reform Commission, Futian Capital,

Gemdale Corporation, Zhongke Holdings, Nanchang government platform companies, Xuzhou Industry Fund, Beike Construction Group, SenseTime, and China Everbright.

The strategic investment from Microware, a leader in Hong Kong's information technology infrastructure, not only enhances Terminus's cash flow reserves but also positions Microware's international team to support Terminus's expansion into overseas markets.

Additionally, sources indicate that Terminus may have initiated its listing process.

Terminus Recognized for Product Excellence and Commercialization Capability

Terminus, which recently received investment from Microware, has a strong industry foundation in the field of artificial intelligence and the Internet of Things (AIoT). Established in 2015, the company offers a comprehensive range of AIoT products, including software, hardware, computing power, and services, through its AIoT operating system, TacOS, targeting enterprises, public domain managers, and other stakeholders.

Previously, Terminus proposed a "model + system" approach for industrial implementation, leveraging domain models deeply integrated with specific scenarios. This approach addresses the challenges of cross-modal data modeling through scenario-defined systems, enabling the gradual development of cross-modal capabilities and reducing the time required for large models to be effectively implemented in specific settings.

As of March 31, 2024, Terminus's products have been deployed by over 700 clients across 136 cities globally, with operations extending to markets in China, the United Arab Emirates, Singapore, and Australia. Notably, Terminus has executed several benchmark projects, including the 2020 Dubai World Expo, the Smart Brain of Qianhai in Shenzhen, the Smart Community in Xuhui District, Shanghai, and the Langfang Grand Theatre.

In terms of capital, Terminus has been a standout performer in the investment landscape. From 2016 to 2021, the company consistently completed a financing round each year. Top-tier investment institutions and leading enterprises, including IDG Capital, SenseTime, JD.com, iFlytek, Wanda Investment, Investcorp, China Everbright, and CITIC industry capital, have all been past investors.

This year, Terminus successfully completed its D-round financing in April. AL Capital and Yangming Equity Investment Fund, the two lead investors in this round, have both expressed their recognition of Terminus's technological foresight and viability. Notably, amidst a competitive market focused on large foundational models, Terminus has chosen to pursue a differentiated technological path for its own model development.

The company's ability to commercialize its innovations is another key reason for attracting investor interest. While some startups allocate 50% to 80% of their revenue to research and development, resulting in significant financial outlay with insufficient commercialization success, Terminus maintains a research and development expense ratio of less than 30%. This figure is slightly above that of larger firms, allowing it to sustain high R&D investment while also demonstrating strong commercialization capabilities.

Previously, Terminus's management stated their ambition to become China's first large-scale profitable AI company. With the strategic investment from Microware and the deepening collaboration between the two companies, Terminus is likely to move closer to achieving this objective.

Microware Intensifies Investment in AI Sector

As an investor, Microware is a leading company in Hong Kong's information technology infrastructure sector, with a broad scope of business encompassing IT solutions, AI technology, cloud services, and cybersecurity.

Founded in 1985 and listed on the Hong Kong Stock Exchange in 2017, Microware has developed into a strategic partner for over 30 global IT brands, including Microsoft, IBM, Red Hat, HP, and Lenovo. Its clients span more than 20 major industries in Hong Kong, including banking and finance, telecommunications, media, and education. Additionally, Microware is an approved contractor for the Hong Kong SAR government, providing services to over 80 government units.

In recent years, Microware has increased its investments in AI solutions, focusing on the research and development of AI infrastructure and its industrial implementation. This year, Microware has engaged in more frequent investments and collaborations within the AI sector.

In May, Microware announced the establishment of two wholly-owned subsidiaries in Shanghai: Microware (Shanghai) Artificial Intelligence Technology Co., Ltd. and Microware (Shanghai) Technology Development Co., Ltd., with registered capital of RMB 60 million and RMB 10 million, respectively, to advance its AI strategy in the Chinese market.

On July 6, during the 2024 World Artificial Intelligence Conference, several key AI projects in Shanghai were signed, including a project involving Microware (Shanghai) Technology Development Co., Ltd. This initiative aims to establish a high-performance heterogeneous computing platform, promote an open-source ecosystem, and provide comprehensive solutions for clients across various industries, including computing power, algorithms, models, data, and AI tools, thereby driving technological innovation and the industrial implementation of AI. The total project investment amounts to RMB 80 million and will be based in Shanghai's Putuo District.

In addition to establishing a presence in Shanghai and executing projects, Microware is also collaborating with leading AI enterprises. In July, Microware announced a strategic partnership with SenseTime, a pioneer in interactive AI. This collaboration will focus on deepening the application and expansion of AI technologies, exploring diverse scenarios such as intelligent customer service, smart education, and smart cities. This alliance model will also facilitate market expansion for both parties globally, particularly in overseas markets, enhancing their international influence and brand image through resource sharing and complementary strengths.

The collaboration between Microware and Terminus has been in the works for some time. On July 17, Wang Guangbo, Chairman of the Board of Microware, visited Terminus's headquarters in Beijing for in-depth discussions with the Terminus team.

During this meeting, Wang emphasized that robust computing infrastructure is the core engine driving the future growth of the AI industry. Microware will partner with Terminus to create an efficient and reliable intelligent computing ecosystem. Leveraging its international team based in Hong Kong, the company aims to expand innovative solutions to markets in mainland China, Southeast Asia, and the Middle East, precisely addressing customer needs and supporting the intelligent upgrade of regional economies.

A month later, Microware's strategic investment in Terminus was officially finalized. For Microware, this marks a significant addition to its AI investment portfolio and signifies the beginning of a new chapter in their close business collaboration.

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