AI startup Fourth Paradigm to raise $144 million in Hong Kong IPO

Chinese AI startup Fourth Paradigm is selling 18.4 million shares in a price range of HK$55.60 to HK$61.16 each as it aims to raise up to $161 million from its initial public offering (IPO). Fourth Paradigm is one of the three Chinese tech startups aiming to raise a combined $280 million in Hong Kong’s IPOs launched on Monday.

We covered Fourth Paradigm back in July after the startup received regulatory approval for its initial public offering (IPO) listing in Hong Kong. With this approval, Fourth Paradigm joined a handful of startup companies to get the nod from China’s securities regulator since the new IPO rules became effective this year.

Meanwhile, a group of three prominent investors, led by New China Capital Management, are purchasing approximately $96.8 million worth of stock, representing a substantial 70.6% of the IPO, Reuters reported, citing the filings. This year, Fourth Paradigm found itself added to the U.S. “Entity List,” imposing restrictions on U.S. technology exports to the company unless they secure a challenging-to-obtain license from the Commerce Department.

Founded in 2014, Fourth Paradigm offers a range of products that are extensively used in various sectors such as finance, retail, manufacturing, healthcare, energy and power, telecommunications, and more, as mentioned on its website. Notably, the CSRC filing indicates that notable investors in Fourth Paradigm include Goldman Sachs, Sinovation, Haitong International Investment, and several state-backed funds.

In addition to Fourth Paradigm, Neusoft Xikang, a Chinese cloud hospital platform, is in the process of raising funds ranging from $81 million to $101 million through the sale of 133.8 million shares, as indicated in regulatory filings. The shares are being offered within a pricing range of HK$4.76 to HK$5.91 each.

Finally, ZX Inc., a mobile games operator, is planning to issue 18.97 million shares, with a price range of HK$11 to HK$14 each, aiming to secure between $27 million and $34 million, as detailed in their prospectus.