Hong Kong’s AI IPO growth produces its newest entrant at this time, as design AI startup Manycore Tech begins buying and selling after in search of as much as 1.02 billion Hong Kong {dollars} ($130 million) in funding, turning into the primary of China’s six celebrated “Little Dragons” from Hangzhou to achieve public markets.
“The IPO is important for us to attract the most talented engineers to join us, to buy more GPUs, and to collect more data,” Victor Huang, Manycore’s chair and one in all its cofounders, advised Fortune forward of the buying and selling debut.
The Hangzhou-based startup is a guess on “spatial intelligence,” transferring past the word- and language-based work of huge language fashions like OpenAI’s GPT and DeepSeek’s V3 to as a substitute create AI fashions that may autonomously work in the actual world.
These packages, additionally known as “world models,” are key to operations like robotics and autonomous driving, the place equipment has to react to exterior stimuli, like how a robotaxi must decelerate in response to altering site visitors circumstances.
Huang described spatial intelligence as much like an individual or animal’s innate means to know the world round them. “When you enter a room, you can understand where you are and what’s in front of you. And if you want to take a seat, you can understand which seat is empty,” he defined.
“People are now trying to apply AI in the physical dimension,” Jixun Foo, senior managing accomplice on the Singapore-based enterprise capital agency Granite Asia, and an early backer of Manycore, stated. He identified that viral movies of humanoid robots dancing, whereas spectacular, are sometimes finishing up pre-programmed routines. “If you want a different performance you have to program it again. You can’t just tell the robot to do this or that action.”
Graham Uden for Fortune
A few of AI’s greatest names are additionally engaged on “world models.” Each ImageNet creator Fei-Fei Li and former Meta chief scientist Yann LeCun see these fashions as the following step in AI growth.
LeCun has argued that video knowledge may also help prepare world fashions, however Manycore and Huang as a substitute suppose the startup’s huge repository of 3D belongings will probably be a extra helpful knowledge set. “I don’t believe that if you have enough video, you can train the rules of the physical world,” Huang stated.
As a substitute, “we’d accumulated a huge amount of 3D data, almost 500 million assets from the real world. We had the training data, so we believed we could make the best physical AI in the world,” he argued.
China’s AI sector has launched a lot of its fashions on an open-source foundation, which has helped to spice up the repute of its AI startups and received converts within the world tech sector, together with in Silicon Valley. “People try Chinese AI. It’s free. It’s open-source. And when they try it, it’s great,” Huang defined. Manycore has already launched a number of open-source fashions, together with SpatialLM, a spatial language mannequin that may perceive and generate 3D environments, and SpatialGen.
Nonetheless, in latest weeks, some tech corporations, like Alibaba and Data Atlas, higher referred to as Z.ai, have began to launch fashions on a proprietary foundation, at the least within the preliminary phases, as monetizing AI work has proved difficult for Chinese language corporations.
However Foo thinks an organization like Manycore can protect its edge even when it open-sources its fashions. “For Manycore, it’s not just about their model, but also the data set they have built. That dataset is unique to them, right? If you have a competitive edge that you can hold on to, then you can open-source something,” Foo stated.
The primary of the ‘Little Dragons’ to go public
Manycore, based in 2011, is among the “Six Little Dragons,” a casual group of six tech and AI startups based mostly in Hangzhou, now one in all China’s main AI hubs. Manycore is the primary of the “dragons” to faucet public markets; Unitree, the buzzy robotics producer, will listing on Shanghai’s inventory trade later this yr.
The corporate acquired its begin as a design software program enterprise, constructing Kujiale, a platform that lets customers create 3D renders of inside areas, and its worldwide counterpart Coohom, which now serves clients in additional than 200 international locations. IDG Capital and Hillhouse Funding are amongst its earlier backers.
Huang was an engineer on Nvidia’s CUDA group earlier than returning to China to construct a enterprise round rendering. “The economy in the U.S. wasn’t doing well at the time, but in China, real estate was booming,” he recalled.
That work helped persuade Foo, who hung out at HP, to again the corporate. “I used to use a lot of 3D software when I was designing HP printers,” Foo defined. “And I thought this was pretty cool: I was using it for mechanical products, and now they are doing it for a physical world.”
In response to its IPO prospectus, Manycore generated 820 million Chinese language yuan ($120 million) in income final yr, rising by 8.6% from the earlier yr. It additionally earned a slim working revenue of 18.6 million yuan ($2.7 million), even because it posted an general internet lack of 428 million yuan ($62.8 million).
China’s actual property market remains to be within the throes of a chronic hunch, which Foo admits is a “headwind” for Manycore. Nonetheless, the corporate is increasing into worldwide markets. “What gives me comfort is the resilience of the team. They stuck in there, and they figured things out.”
Design corporations have been hit laborious in latest months; shares in Adobe and Figma have plunged as AI suppliers like OpenAI and Anthropic work design instruments into their fashions. Some design startups are reinventing themselves as AI corporations: Canva on Thursday launched a brand new suite of agentic choices on Thursday that enable customers to automate a lot of the design course of.
A Hong Kong growth
This isn’t Manycore’s first try at public markets. The corporate was on observe for a U.S. itemizing in 2021, earlier than withdrawing its utility after Beijing regulators scrutinized Didi World’s U.S. IPO and compelled the ride-hailing large to delist, unnerving different Chinese language corporations contemplating U.S. listings.
“Nowadays, the Hong Kong market is the best for a Chinese AI company,” Huang says.
Manycore is simply the newest AI IPO to hit Hong Kong’s market this yr. AI and AI-related corporations have led to a surge in debuts within the Chinese language metropolis, with listings elevating nearly $14 billion within the first quarter of the yr. Some shares have surged by eye-popping quantities: MiniMax and Data Atlas, two AI mannequin builders, have risen by round 450% and 650% respectively since their early January IPOs.
Extra IPOs are on the way in which. Victory Big, which makes printed circuit boards, hopes to boost $2.2 billion in its IPO; its shares will debut on April 21. Different startups reportedly contemplating IPOs are Kimi developer Moonshot AI and sensible glasses producer Rokid.
Bonnie Chan, CEO of Hong Kong Exchanges and Clearing, pushed again at this week’s HSBC World Funding Summit in opposition to the characterisation of the market as merely a conduit for Chinese language capital. “When people say that Hong Kong’s stock exchange is just hosting Chinese companies, it’s not doing those companies justice,” she stated, noting that round 40% of corporations that listed in Hong Kong final yr generated greater than half their income from non-Chinese language sources. “I call them Chinese MNCs. They’re very international.”
China’s AI sector has been underneath recent scrutiny from world traders since early final yr, when DeepSeek—one other of Hangzhou’s “Little Dragons”—launched its highly effective and surprisingly environment friendly fashions, altering the dialog about Chinese language innovation.
Bodily AI, specifically, is rising as a Chinese language power. The nation’s dense manufacturing ecosystem can produce robots, sensors, and superior parts at a price under rivals in different international locations. Heavy funding within the electrical grid additionally permits China to quickly develop the information centres wanted to coach giant fashions. “It’s not just a race on the foundational model,” Foo stated. “It’s a race on the infrastructure. It’s a race on compute. It’s a race on energy.”
However Foo and Granite Asia, which was born from the Asia operations of former VC large GGV Capital, aren’t fully centered on the Chinese language market. “We are more pan-Asian,” he defined. Earlier this yr, Granite Asia partnered with DBS to launch a brand new $110 million fund to provide the Southeast Asian financial institution’s clients “early access” to IPO-stage corporations within the area.
“Our strategy is to be able to invest in companies early. We want to help them grow and scale outside of their home market,” Foo says. “We have a good pipeline of companies going IPO.”
