Chinese AI startup ModelBest starts pre-IPO process

Chinese AI start-up ModelBest has initiated its pre-initial public offering (IPO) preparation process in anticipation of a listing on the mainland Chinese market. The company capitalizes on the rising demand for compact AI models that run locally on devices, such as smartphones, laptops, and cars. ModelBest's strategy centers around developing lightweight models optimized for domestic processors to bypass China's scarcity of advanced American computing chips.

The firm has enlisted Citic Securities to guide its pre-listing preparations, with the mandatory process typically taking at least three months. A licensed sponsor, often a securities firm or investment bank, oversees the company's transformation into a listing-ready entity by addressing aspects such as corporate governance, risk management, audit readiness, and information disclosure practices.

ModelBest, founded in August 2022, represents one of many AI firms embracing "edge AI" technology. Domestic constraints, including talent availability and data access, present limited roadblocks. However, the primary hurdle lies in compute power, as acknowledged by ModelBest co-founder and chief technology officer Zeng Guoyang. In a recent interview with Chinese tech news outlet 36Kr, Zeng highlighted that the primary bottleneck is compute power.

To overcome this challenge, ModelBest has developed models that leverage domestic computing resources.

In May, ModelBest unveiled MiniCPM5-1B, a 1-billion-parameter AI model trained exclusively on Huawei Technologies' Ascend chips. The model has been recognized as the top-performing open-weight system under 2 billion parameters, surpassing Alibaba Group Holding's Qwen3.5-2B, according to benchmark firm Artificial Analysis. ModelBest's lightweight models are already deployed across various sectors, including consumer electronics, automotive platforms, and robotics.

The company collaborates with technology giants, such as Huawei, Samsung Electronics, SAIC Motor, Changan Automobile, and Unitree Robotics.

Although the firm has not disclosed its targeted fundraising size, timeline, or preferred listing location, it raised over 5 billion yuan (US$738 million) in funding in the current year. ModelBest's latest Series C+ funding round in the previous month elevated its valuation to 20 billion yuan, according to Shanghai Mejoy Capital, one of the company's backers.

The regulatory filing, which listed the registered capital of 1.55 million yuan and Zeng as the legal representative, further underscores ModelBest's progress towards potential listing next year.