Provider of Voice Services Becomes China’s Latest AI Unicorn

Unisound, a provider of artificial intelligence-powered voice services, has netted 600 million yuan ($89.3 million) from several state-backed funds, making it China’s newest “unicorn” in the sector, with a valuation of more than $1 billion.

A unicorn is a startup with a valuation of more than $1 billion.

The funding round was led by the China Internet Investment Fund, which was jointly set up by the Ministry of Finance and the Central Cyberspace Affairs Commission to promote high-tech investments in 2017, Unisound said in a statement (link in Chinese) on Thursday. The other two investors — CICC Jiacheng Investment Management Co. Ltd. and JIC Capital Management (Tianjin) Ltd. — are also state-backed funds.

Founded in 2012, Beijing Unisound Information Technology Co. Ltd. specializes in using artificial intelligence (AI) to provide services that can listen to and respond to speech, and its products and services are used in home appliances, cars and hospitals. In May, the company raised $100 million from a group led by the state-owned CEC Data Capital.

The move comes at a time when China is promoting the development of cutting-edge technologies — including AI-related services — through massive state-backed capital support. This is part of a broader effort to transform the nation from a low-end manufacturer to a high-tech driven economy.

“That Unisound has attracted the interest of state-backed funds shows our technology and commercial capability have been widely recognized,” CEO and co-founder Huang Wei said, adding that the money will be used for staff expansion and ramping up research and development.

However, the startup is expected to face some roadblocks to success in an AI-voice sector increasingly crowded with big-name players. Tech titans including Alibaba Group Holding Ltd., Baidu Inc. and Xiaomi Corp. have all rolled out their own AI-equipped smart speakers in recent years.

Unisound generated 100 million yuan in revenue last year, and aims to triple that by 2018, according to Huang Wei.

China’s AI sector has seen a flurry of deal-making recently. On Tuesday, DeePhi Technology Co. Ltd., a Beijing-based machine learning specialist, was acquired by U.S. chipmaker Xilinx Inc. Last month, AI chipmaker Cambricon Technologies Corp. Ltd. said it completed a new round of fundraising that valued it at $2.5 billion.

Contact reporter Mo Yelin (yelinmo@caixin.com)