Former Tencent scientist builds leading industrial AI company, Simo Technology aims for IPO, with a total loss of 2.2 billion over 3 years

Text | Frontline of Entrepreneurship

In recent years, AI has begun to move from the cloud to manufacturing factories, and industrial intelligence has become a hot direction for technology and industrial capital to bet on together.

Many AI companies, with the intention of “redefining industrial automation,” have rushed into this field, and SmartMore Inc. (hereinafter referred to as “SmartMore Technology”) is one of the more representative companies.

SmartMore Technology identifies itself as an AI company, with intelligent agents as its core product and top manufacturing enterprises as its clients. After six years of establishment, it has already become a leader in the domestic industrial AI intelligent agent market.

However, in stark contrast, the company’s market share is less than 10%, its overall gross margin is below 40%, and it has accumulated losses of over 2.2 billion yuan in three years, with operating cash flow continuously bleeding over 1.1 billion yuan.

All grand narratives ultimately need to be grounded in account statements. Now, on SmartMore Technology’s ledger, it is evident that a balance between scale and profit has yet to be found.

1. Industrial AI Intelligent Agent Leader Faces Double-Edged Pressure

SmartMore Technology was founded in 2019 by Jia Jiaya, a lifelong professor in the Department of Computer Science and Engineering at the Chinese University of Hong Kong and a former scientist at Tencent’s YouTu Lab. Jia Jiaya was recommended from Fudan University to study for a PhD at the Hong Kong University of Science and Technology, and after graduation, he became a professor at the Chinese University of Hong Kong. Xu Li, the chairman and CEO of SenseTime, was once one of Jia Jiaya’s students.

SmartMore Technology represents Jia Jiaya’s key shift from academia to industry, and he named the company SmartMore, signifying the need for not only intelligence but also vision.

In this entrepreneurial venture, Jia Jiaya aims at the “cornerstone of human progress”—the industrial sector. With the rapid development of AI technology, a transformation is underway in the global industrial field, moving from the automation era to the AI-driven era, where industrial AI solutions will redefine manufacturing rules.

According to a report by ZhiShi Consulting, the global industrial AI intelligent agent market size is expected to expand from 14.6 billion yuan in 2023 to 36.7 billion yuan in 2025, with a compound annual growth rate of 58.6%. It is projected to reach 162 billion yuan by 2030, with a compound annual growth rate of 34.6% from 2025 to 2030.

Image / Prospectus

Among them, China’s industrial AI intelligent agent industry market size is expected to grow from 5.8 billion yuan in 2023 to 14.8 billion yuan in 2025, with a compound annual growth rate of 59.9%, and is expected to reach 90.6 billion yuan by 2030, with a compound growth rate of 43.6% from 2025 to 2030.

SmartMore Technology was born in such a “golden track.” By 2025, the company is expected to be the largest industrial AI intelligent agent provider in China, with a market share of 5.8%.

Image / Landscape of China’s Industrial AI Intelligent Agent Industry (Image Source: Prospectus)

However, the “gold content” of this first position is not as solid as it sounds. The competitive pressure faced by SmartMore Technology can be aptly described as being “blocked in front and chased from behind.”

In front of it, SmartMore Technology’s core clients may have the potential to develop products in-house. Giants in the manufacturing industry, such as Tesla and Luxshare Precision, are both clients of SmartMore Technology and may also become its future competitors.

After all, when AI capabilities become the core competitiveness of the manufacturing industry, will these leading companies continue to outsource? In the prospectus, SmartMore Technology frankly admits: “Several of our clients may develop similar products independently.”

It is reported that Huawei and BYD have already begun to build large-scale AI teams, and Tesla has invested heavily in the AI field. If they choose to develop in-house, SmartMore Technology will not only face order losses but will also encounter a formidable competitor.

Behind it, SmartMore Technology also faces competition from peers and intensifying industry rivalry. International giants like Keyence and Siemens are eyeing the market, while domestic newcomers like Huari Technology and Weiyi Zhizao are rapidly rising.

The entire track presents a decentralized, competitive pattern, with no single company forming an absolute monopoly. The combined market share of the second to fifth largest companies reaches 17.1%, far exceeding the 5.8% of SmartMore Technology. In the context of rapid growth in the industrial AI intelligent agent market, SmartMore Technology’s 5.8% market share may also be diluted or surpassed.

2. Gross Margin of Only 37.3%, Relying on Hardware to Support Half of the Business

From the first AI quality inspection project received after the company’s establishment in 2019 to the launch of the cloud-edge integrated AI vision software in 2020, and then to the introduction of intelligent detection robots in 2021, SmartMore Technology achieved a business layout from software to hardware in three years.

As of now, its core business includes two major categories: industrial AI intelligent agents and AI infrastructure, with the industrial AI intelligent agent business further divided into three items: robots, edge AI sensors, and intelligent agent software systems.

Image / Intelligent operation robot launched by SmartMore Technology (Image Source: Prospectus)

By 2025, SmartMore Technology’s robots had completed inspections of over 17 billion products or components and delivered approximately 140,000 cutting-edge industrial intelligent agents.

SmartMore Technology defines itself in the prospectus as a company that is redefining industrial automation in the AI era.

However, an analysis of its revenue composition reveals that hardware business supports nearly half of SmartMore Technology’s growth.

Image / Prospectus

From 2023 to 2025 (hereinafter referred to as “the reporting period”), SmartMore Technology’s total revenue was 485 million yuan, 756 million yuan, and 1.086 billion yuan, respectively. Among these, the revenue share of industrial AI intelligent agents was 62.4%, 73.8%, and 78.5%, making it the company’s primary source of income.

During the same period, the revenue share of AI infrastructure was 28.4%, 25.3%, and 20.1%, while the revenue share of other businesses was 9.2%, 0.9%, and 1.4%.

In SmartMore Technology’s core industrial AI intelligent agent business, the revenue share of the robot business rose from 29% in 2023 to 40.1% in 2025, while the revenue share of edge AI sensors increased from 2.7% to 6.9%.

This indicates that by 2025, the hardware business will account for at least 47% of SmartMore Technology’s total revenue (considering the bundled hardware in AI infrastructure deliveries, the actual share of hardware-related income may be even higher).

This business structure also results in SmartMore Technology’s gross margin being significantly different from that of AI companies that primarily focus on software. During the reporting period, the company’s overall gross margins were 30.5%, 32.3%, and 37.3%, which, despite continuous growth, remains lower than the 60% or even higher gross margins of pure software AI companies. For instance, AI software company Hehe Information, listed on the Science and Technology Innovation Board, has maintained a gross margin of over 80% for the past six years. Another publicly listed AI application company, Wanxing Technology, has achieved a gross margin exceeding 90%.

Image / Gross profit and gross margin of various businesses at SmartMore Technology (Image Source: Prospectus)

From the gross margin levels of each business, the hardware margins of robots and edge AI sensors during the reporting period were all lower than the gross margin of the intelligent agent software system, dragging down the overall gross margin level of the company.

Since its establishment, SmartMore Technology has obtained multiple rounds of financing, with investors including IDG Capital, Yingshan Capital, Lenovo Group, Cornerstone Capital, ZhenFund, Songhe Capital, and Sequoia China. By the time it completed its final round of financing in February 2026, the company’s post-investment valuation had reached 1.23 billion USD.

However, in the valuation logic of the secondary market, gross margin levels significantly affect the valuation quality of technology companies. A high proportion of low gross margin hardware will lead the market to value the company more like a manufacturer or integrator, while a higher proportion of high gross margin software and services will make it easier to enjoy a valuation premium as an AI tech company.

Based on 2025 revenue, the 1.23 billion USD valuation of SmartMore Technology corresponds to a static price-to-sales ratio of about 8.2 times. This multiple is higher than the valuation levels of pure hardware companies and some software-hardware integrated peers, reflecting the market’s recognition of its high growth expectations, while also implying a high expectation for SmartMore Technology to increase the proportion of software revenue and improve gross margin in the future.

Whether SmartMore Technology can fulfill these expectations will determine whether the company’s valuation can stand firm.

3. A Clientele Comparable to a Luxurious “Circle of Friends,” Yet It Has Not Established a Self-Sustaining “Blood Circulation” Loop

One of the most eye-catching pieces of information in SmartMore Technology’s prospectus is the clients it serves.

As of December 31, 2025, SmartMore Technology had served over 730 clients, increasing from 229 clients in 2023 to 497 clients in 2025.

Among SmartMore Technology’s clients are numerous industry-leading enterprises, such as electric vehicle leader Tesla, optical and precision measurement giant Carl Zeiss, consumer electronics “contract manufacturing king” Luxshare Precision, and the world’s largest display panel manufacturer BOE, covering multiple high-growth sectors including consumer electronics, new energy, precision manufacturing, and rail transportation.

SmartMore Technology’s entry into the supply chains of these top enterprises signifies multidimensional industry recognition of its technological strength, product reliability, and service capabilities.

However, such a luxurious “circle of friends” has not yet brought healthy cash flow to SmartMore Technology.

During the reporting period, SmartMore Technology’s net cash flow from operating activities was a cash outflow of 372 million yuan, 424 million yuan, and 327 million yuan, with a cumulative net outflow of 1.123 billion yuan over three years.

During the same period, the company’s annual losses were 546 million yuan, 735 million yuan, and 991 million yuan, with a cumulative loss of 2.272 billion yuan; adjusted net losses were 394 million yuan, 379 million yuan, and 272 million yuan, with a cumulative adjusted net loss of 1.045 billion yuan.

This means that although client orders have brought in revenue on paper, they have not yet converted into real cash flow.

By the end of each reporting period, SmartMore Technology’s trade receivables and bills receivable were 270 million yuan, 533 million yuan, and 744 million yuan, respectively, with recorded credit loss provisions for trade receivables and bills receivable of 80.1 million yuan, 77.9 million yuan, and 87.6 million yuan, respectively.

Moreover, the company’s payment collection cycle remains high. During the reporting period, the turnover days for trade receivables and bills receivable were 214 days, 194 days, and 214 days.

In addition, SmartMore Technology has also invested heavily in research and development, as well as sales and marketing. In 2023, R&D expenses and sales and marketing expenses totaled 435 million yuan, rising to 569 million yuan by 2025. Although the proportion of total revenue decreased from 89.6% in 2023 to 52.4% in 2025, the absolute amount is still growing, coupled with a surge in administrative expenses, resulting in overall expenses still far exceeding gross profit.

By 2025, SmartMore Technology’s general and administrative expenses surged to 600 million yuan, accounting for 55.3% of revenue, a year-on-year increase of over three times.

SmartMore Technology explains in its prospectus that this is mainly due to “a significant increase in share-based payment expenses”—the company’s three directors received share-based compensation exceeding 100 million yuan each in 2025. Equity incentives are common in startups, but such a large-scale equity incentive concentrated in one year inevitably raises concerns about its operating costs.

Regarding the company’s continued loss status, SmartMore Technology stated in its prospectus that the main reason is that the company is in its early stage, with strategic focus on achieving long-term success and financial returns in the industrial AI intelligent agent market rather than sacrificing future market potential for short-term profits. The company has made substantial investments in product development, market expansion, and infrastructure construction to achieve sustained larger-scale operations; therefore, profitability is currently still being established and optimized.

Moreover, SmartMore Technology did not explicitly provide a timeline for achieving breakeven in its prospectus.

SmartMore Technology justifies its continuous losses by citing a long-term layout, which aligns with the early development patterns of the industry. However, it cannot conceal the core reality that its self-sustaining capability has yet to be established, which has become one of the critical tests to support its 1.23 billion USD valuation and its pursuit of an IPO.

After all, the patience of capital is limited. Jia Jiaya and his SmartMore Technology not only need to look up at the stars on the road to redefining industrial automation in the AI era but also need to stay grounded on the company’s cash flow, ultimately needing to prove the value of the company through profitability.