AI startup Xiaoice closed a Series A financing round from investors including Hillhouse Capital, GGV Capital, IDG Capital, and 5Y Capital, bringing the company’s valuation to over USD 1 billion. Existing backers Northern Light Venture Capital and NetEase also participated in the round.
Spun-off as an independent entity by Microsoft in July 2020, Xiaoice develops interactive AI systems and uses emotional computing frameworks to create products like virtual avatars, chatbots, and robotic process automation tools. The company counts clients in a wide range of sectors, including finance, retail, automobiles, real estate, and textiles.
The company is a leader in natural language processing. This is evident in the success of its virtual avatar programmed to behave like an 18 year-old woman. The avatar gained huge popularity in China before it was released in Japan and Indonesia.
In 2020, Xiaoice’s annual revenue exceeded RMB 100 million (USD 15.4 million), with a 90% share of China’s automated financial report vertical.
While Xiaoice provides its tech to smartphone makers like Xiaomi, Huawei, and Oppo, Xiaoice’s technology is also used in apps like ByteDance’s Jinri Toutiao, NetEase Cloud Music, and Tencent’s QQ. Going forward, the company will continue to build out its backend automation tools and explore new use cases for its interactive AI.
KrASIA Connection features translated and adapted content published by 36Kr. This article was originally written by Su Jianxun for 36Kr.