Baidu’s Smart Living Group, which is the search engine’s voice AI system and device business and also known as “Xiaodu Technology,” is closing a round of independent fundraising, led by Baidu Capital as well as CPE Capital, and with participation of IDG Capital, that will value the unit at approximately RMB 20 billion (USD 2.9 billion), the firm announced on Wednesday.
This comes after earlier reports speculated that Baidu might spin off the unit and list it on Shanghai’s Star Market. Baidu told KrASIA that this is not a spin-off and declined to comment on the listing plan.
According to the company, the transaction is expected to close in the fourth quarter of 2020 with China Renaissance serving as a financial adviser. After the deal, Baidu will hold super voting rights in Xiaodu Technology, and continue to consolidate the financial results of the unit.
“We are pleased to see the rapid growth of SLG since inception in 2017, to become a leading player in China (and globally) in the fast-growing voice assistant and smart devices market by leveraging Baidu’s AI capabilities,” CEO and chairman Robin Li said in a statement. “This transaction marks another milestone for Baidu to incubate new businesses with its leading technologies and strong synergies from Baidu Core, to capture large market opportunities.”
Xiaodu Technology operates DuerOS, Baidu’s conversational AI system, and DuerOS-powered smart speakers and displays. Per stats from research firm Canalys, Xiaodu sold 8.63 million units of its smart speakers in the first half of 2020, surpassing Alibaba’s Tmall Genie and Xiaomi’s offerings.