23.5 billion, Suzhou’s super unicorn is going to IPO

After 9 years of entrepreneurship, Innoscience has raised more than 6 billion yuan in total financing, and its valuation has reached an astonishing 23.5 billion yuan. The list of investors is as long as dozens of companies: Fukun Venture Capital, Dongfang State-owned Assets, Suzhou Zhanyi, Wujiang Industrial Investment, Shenzhen Business Venture Capital, Ningbo Jiake Investment, Jiaxing Jinhu Investment, Zhuhai Venture Capital, National Venture Capital, CMB International Capital, Everest Venture Capital, Huaye Tiancheng Capital, Zhongtian Huifu, Haoyuan Enterprise, SK China, ARM, Titanium Capital led the investment, Yida Capital, Haitong Innovation, China-Belgium Fund, SAIF Gaopeng, CMB Securities Investment, Wuhan Hi-Tech, Dongfang Fuxing, Yonggang Group, Huaye Tiancheng Capital… What is striking is that Zeng Yuqun of CATL also invested 200 million yuan in his personal name.

Founded in 2015, Innoscience is the global leader in the field of third-generation semiconductor silicon-based gallium nitride, and is also the only IDM company in the world that can simultaneously mass-produce high and low voltage gallium nitride chips. Semiconductor technology is often considered a male-dominated industry, but the founder of Innoscience is a female doctor, and she is also a cross-industry entrepreneur, which is really eye-catching.

NASA female scientists cross industries to do third-generation semiconductors

Innoscience has a bunch of PhDs sitting here.

First is the doctoral founder Luo Weiwei, 54 years old, who is a doctor of applied mathematics from Massey University in New Zealand. Previously, Luo Weiwei worked at NASA for 15 years, from senior project manager to chief scientist. After leaving NASA, Luo Weiwei chose to start a business. In addition to Innoscience, Luo Weiwei is also a director of a display and micro-screen technology research and development company. “Luo Weiwei is a world-class scientific and visionary entrepreneur.” The prospectus said.

One of Luo Weiwei’s partners is Wu Jingang, who received a doctorate in physical chemistry from the Chinese Academy of Sciences in 1994 and serves as CEO. Another partner is Jay Hyung Son, who has entrepreneurial experience in semiconductors and holds a Bachelor of Science degree from the University of California, Berkeley.

The company also has a group of doctors, including Wang Can, a Ph.D. in Physics from Peking University, Dr. Yi Jiming, a professor at the School of Law of Huazhong University of Science and Technology, Dr. Yang Shining, former senior vice president of technology development and manufacturing at SMIC, and Dr. Chen Zhenghao, former chief engineer of Intel, founder of Guangdong Jingke Electronics and recipient of the Bronze Bauhinia Star in Hong Kong…

A female doctor led Innoscience on an unexpected pioneering road, doing something that many insiders dare not do, with extraordinary courage. Luo Weiwei said this about this startup:

“I think experience should not be a bottleneck or barrier to development. If you think it is feasible, all your senses and wisdom will be open to it, and you will find a way to do it. Perhaps it was the 15 years working at NASA that accumulated a lot of courage for my subsequent startup. I don’t seem to have so much fear about exploring in the “no man’s land”. I will judge the feasibility of this thing at the execution level, and then complete it step by step according to logic. Our development to the present has also proved that there are not many things in this world that cannot be accomplished.”

This group of high-tech talents gathered together, aiming at the domestic blank – gallium nitride power semiconductors. Their goal is very clear, to build the world’s largest gallium nitride production base that adopts a full industrial chain model and integrates design, research and development, production and sales.

Why is the business model so important? Innoscience has a clear idea.

To achieve the widespread application of gallium nitride technology in the market, product performance and reliability are only the foundation, and three other pain points need to be solved.

The first is cost. A relatively low price must be set so that people are willing to use it. The second is to have large-scale mass production capabilities. Third, to ensure the stability of the device supply chain, customers can devote themselves to the development of products and systems. Therefore, the team concluded that only by expanding the production capacity of gallium devices and having an independent and controllable production line can the pain points of large-scale promotion of gallium nitride power electronic devices in the market be solved.

Strategically, Innoscience strategically adopted 8-inch wafers from the beginning. At present, the size of semiconductors and the difficulty coefficient of manufacturing processes are growing exponentially. In the entire third-generation semiconductor development track, many companies are still using 6-inch or 4-inch processes, and Innoscience is already the only industry pioneer to make chips with 8-inch processes.

Innoscience has strong execution capabilities. Today, the team has realized the initial plan and has two 8-inch silicon-based gallium nitride production bases. It is the world’s highest-capacity gallium nitride device manufacturer.

Also because of its high technological content and knowledge-intensiveness, the company has about 700 patents and patent applications worldwide, covering key areas such as chip design, device structure, wafer manufacturing, packaging and reliability testing. This was also overly eye-catching internationally. Previously, Innoscience faced three lawsuits filed by two foreign competitors for potential intellectual property infringement of several of the company’s products. However, Innoscience said it was confident that it would achieve a final and comprehensive victory in the dispute.

Last year’s revenue was nearly 600 million

Thanks to its accurate prediction of industry trends and product research and development capabilities, Innoscience has achieved rapid growth.

The prospectus shows that from 2021 to 2023, Innoscience’s revenue will be 68.215 million yuan, 136 million yuan and 593 million yuan, respectively, with a compound annual growth rate of 194.8%.

Among them, Innoscience’s largest customer is “CATL”, and CATL contributed 190 million yuan in revenue to the company in 2023, accounting for 32.1% of the total revenue.

Innoscience, whose revenue continues to grow, has not yet made a profit. During the reporting period, Innoscience lost 1 billion yuan, 1.18 billion yuan and 980 million yuan, totaling 3.16 billion yuan.

In terms of regional layout, China is the business focus of Innoscience, with revenues of 68 million, 130 million and 535 million during the reporting period, accounting for 99.7%, 95.5% and 90.2% of the total revenue in the same year.

The overseas layout is also slowly being planned. In addition to establishing factories in Suzhou and Zhuhai, Innoscience has also established subsidiaries in Silicon Valley, Seoul, Belgium and other places. Performance is also growing slowly. From 2021 to 2023, the company’s overseas market accounted for 0.3%, 4.5% and 9.8% of the total revenue in the same year, and the revenue in 2023 was close to 58 million yuan.

The reason why it can achieve rapid development momentum is mainly due to its response strategy: In the face of the changing needs of downstream customers in various application fields, Innoscience has two hands. On the one hand, it focuses on the standardization of major products, which can quickly expand the production scale and drive production. On the other hand, it focuses on customized design to quickly respond to customers’ professional needs.

According to Frost & Sullivan, Innoscience is the world’s first company to achieve mass production of 8-inch silicon-based gallium nitride wafers, with an 80% increase in wafer output and a 30% reduction in the cost of a single device. By the end of 2023, the formula design capacity will reach 10,000 wafers per month.

In 2023, Innoscience has provided gallium nitride products to about 100 customers at home and abroad, and has released product solutions in lidar, data centers, 5G communications, high-density and efficient fast charging, wireless charging, car chargers, LED lighting drivers, etc. The company also cooperates with domestic and foreign manufacturers such as Xiaomi, OPPO, BYD, ON Semiconductor, and MPS in application development.

Zeng Yuqun invested 200 million yuan, and a 23.5 billion super unicorn appeared

The third-generation semiconductor is undoubtedly a huge track that bets on the future. As silicon-based technology approaches its development limit, third-generation semiconductors represented by gallium nitride and silicon carbide are becoming a wave leading the next generation of information technology.

As a third-generation semiconductor material, gallium nitride has the advantages of high temperature resistance, high voltage resistance, high frequency, high power, etc., and has high energy conversion rate and small size. Compared with silicon devices, it can reduce energy loss by more than 50% and reduce equipment volume by more than 75%. The application prospects are very broad. With the maturity of large-scale production technology, the demand for gallium nitride will usher in explosive growth.

With a good track and strong team, Innoscience is naturally very popular in the primary market. Capital with a sharp eye is scrambling to invest. Almost every round of financing of Innoscience is a super large amount of financing.

The prospectus shows that Innoscience has received support from local industrial funds such as Suzhou Zhanyi, Zhaoyin No. 1, Zhaoyin Win-Win, Wujiang Industrial Investment, and Shenzhen Business Venture Capital since its establishment. In April 2018, Innoscience received investment from Ningbo Jiake Investment and Jiaxing Jinhu, with an investment amount of 55 million yuan and a registered capital of 1.78 billion yuan. In July of the same year, Zhuhai Venture Capital made a strategic investment of 90 million yuan in Innoscience.

In 2019, Innoscience completed a round B financing of 1.5 billion yuan, with investors including Tongchuang Excellence, Xindong Venture Capital, National Venture Capital, Everest Venture Capital, Huaye Tiancheng, CMB International, etc., and introduced SK China, ARM, Instant Technology, and Jinxin Microelectronics. At this time, Innoscience has 25 shareholders.

In May 2021, the company completed a round C financing of 1.4 billion yuan, with investors including: Shenzhen Co-Creation Future, Zibo Tianhui Hongxin, Suzhou Qijing Investment, Xiamen Huaye Qirong and other investment institutions. In this round of financing, Zeng Yuqun subscribed to Innoscience’s registered capital of 75.0454 million yuan with 200 million yuan as an individual investor.

In February 2022, the company once again completed a round D financing of up to 2.6 billion yuan, led by Titanium Capital, followed by Yida Capital, Haitong Innovation, China-Belgium Fund, CDH Gaopeng, CMB Investment and other institutions. As the lead investor in this round, Titanium Capital contributed more than 20% of the capital in this round and is also the largest investor, investing 650 million yuan.

In April 2024, Wuhan Hi-Tech and Dongfang Fuxing invested another 650 million yuan to become its E-round investors. The prospectus shows that Innoscience’s total financing amount exceeded 6 billion yuan before its IPO, and its valuation has reached 23.5 billion yuan, which can be called a super unicorn.

The reason why institutions flocked to invest in Innoscience is that, as Gao Yihui, the founder of Titanium Capital, said, “Gallium nitride, as a new type of semiconductor material, is a brand-new field. It is also one of the few fields that are not far behind foreign countries and is most likely to overtake my country. The market prospects are very broad.”

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