Kingsoft Cloud Secures $300 Million in Series D Funding to Expand into Verticals Including Government, Finance, Manufacturing, and Healthcare with Aggressive Price Cuts

On December 12, VCBeat learned that Kingsoft Cloud, under Lei Jun’s umbrella, announced the completion of a $300 million Series D financing round, marking the largest single-round funding amount in the cloud industry. With this round, Kingsoft Cloud’s post-money valuation reached $1.9 billion, making it the most highly valued independent cloud service provider in China.

According to relevant announcements from Kingsoft Group, Kingsoft Cloud issued a total of 353.5 million shares of Series D preferred stock in this round of financing. As lead investors, Liyue Investors and Minsheng Investors subscribed for 58,922,728 and 117,845,456 shares of Series D preferred stock, respectively, at investment amounts of USD 50 million and USD 100 million. As a follow-on investor, Kingsoft Software subscribed for 176,768,184 shares of Series D preferred stock at an investment amount of USD 150 million. Upon completion of the financing, on a fully diluted basis, the shareholding percentages of Kingsoft Software, Minsheng Investors, and Liyue Investors in Kingsoft Cloud were 51.93%, 5.26%, and 2.63%, respectively.

Kingsoft Cloud, under Lei Jun’s umbrella, announces completion of $300 million in Series D financing

At the media briefing for its Series D financing, Wang Yulin, CEO of Kingsoft Cloud, stated that this round of funding demonstrates the capital market’s continued recognition of Kingsoft Cloud and will provide ample momentum for the company’s sustained high-speed growth. As one of the top three public cloud service providers in China, Kingsoft Cloud announced comprehensive price reductions for its mainstream products to lower the barrier to cloud adoption for enterprises and promote inclusive cloud computing services. The company also plans to increase R&D investment in artificial intelligence, consolidate and expand its leading position in internet sectors such as video and gaming, and comprehensively expand into additional vertical industries including government affairs, manufacturing, finance, and healthcare. Kingsoft Cloud aims to achieve annual revenue exceeding RMB 10 billion and capture a 30% share of China’s public cloud IaaS market within the next three years.

Kingsoft Cloud’s post-investment valuation reaches $1.9 billion, making it China’s highest-valued independent cloud service provider

Price reductions are one of the most direct means to promote inclusive cloud computing and stimulate enterprises’ migration to the cloud, but this must be underpinned by advantages in scale, cost, and capital. According to the “H1 2017 China Public Cloud Services Market Tracking Report” released by IDC, Kingsoft Cloud held more than 6.5% of the market share in China’s public cloud IaaS sector, with its revenue ranking among the top three. Currently, Kingsoft Cloud has established an absolute leadership position in internet sectors such as video and gaming, and it is China’s largest commercial storage cloud service provider, with data storage volume exceeding 600 petabytes.

Mainstream Products See Across-the-Board Price Cuts, Benefiting Users

Wang Yulin stated that with the enhancement of the company’s technological product capabilities and operational efficiency, Kingsoft Cloud is well-positioned to meet the growing demand for cloud migration among more customers through price reductions. Following this round of financing, Kingsoft Cloud will implement unprecedented across-the-board price cuts. Specifically, prices for CDN and cloud database Redis will hit new industry lows, with maximum reductions of 50% and 60%, respectively; cloud server prices will be reduced by up to 30%; and for the KS3 object storage product, data transfer fees will be slashed to their lowest possible level, while storage prices will see an additional 10% reduction.

According to a report released by Tractica, the global artificial intelligence industry is projected to reach $36.8 billion in 2025. Aligning with the overarching trend of the intelligent era, Kingsoft Cloud has been continuously strengthening its AI capabilities to help more enterprises reap the benefits of AI. This June, Kingsoft Cloud launched Kingsoft AI Propeller (KAP), an AI cloud solution spanning four layers: IaaS, PaaS, SaaS, and industry-specific solutions. It has already been widely applied across multiple sectors, including e-commerce, traditional manufacturing, smart office environments, and scientific research, becoming a new growth pole and engine for Kingsoft Cloud.

Wang Yulin stated that following this round of financing, Kingsoft Cloud will continue to increase its R&D investment in the field of AI, leverage its AI capabilities, and consolidate and expand its leading position in internet sectors such as video and gaming. Currently, Kingsoft Cloud serves 90% of the leading customers in industries including internet, media, and broadcasting, with its business covering various video formats such as live streaming, short-form video, long-form video, and OTT. In the gaming sector, Kingsoft Cloud provides one-stop cloud service solutions to 90% of major game publishers and content providers (CPs) in China, having served thousands of games cumulatively. It has been a core advertising agency partner for Xiaomi’s gaming industry for three consecutive years, gradually perfecting its gaming ecosystem. Kingsoft Cloud’s AI-driven offerings, including the “AI Picture Quality+” image enhancement technology, the one-stop AI content security and compliance platform “Kingsoft Cloud Jinjing,” and the intelligent marketing platform KIR, help clients in the video and gaming industries achieve superior intelligent service experiences.

Comprehensive Layout Across Multiple Industries, Committed to Becoming a Leader in China's Public Cloud

“In addition to providing superior cloud services to internet companies in sectors such as video and gaming, Kingsoft Cloud is also committed to helping traditional enterprises undergo digital transformation and upgrading. Traditional enterprises often handle highly sensitive data and are burdened by legacy IT systems, posing significant challenges to cloud migration,” pointed out Wang Yulin. “Kingsoft Cloud will comprehensively expand its presence across more industries, including government affairs, manufacturing, finance, and healthcare, leveraging the integration of cloud computing and artificial intelligence to facilitate comprehensive industry upgrades.”Leveraging big data and industry analysis capabilities, Kingsoft Cloud is accelerating the advancement of smart government initiatives, continuously promoting projects such as the construction of Beijing’s e-government cloud, while striving to enhance intelligent manufacturing capabilities in enterprises. By employing intelligent technologies, the company is advancing smart healthcare initiatives, including digital hospitals, AI-assisted imaging diagnosis, collaborative chronic disease management, and rational drug use, while deepening long-term collaborations with Peking University People’s Hospital and The University of Hong Kong-Shenzhen Hospital. Furthermore, by harnessing deep learning and data analytics capabilities, Kingsoft Cloud is fully committed to helping financial sector clients improve their decision-making and risk management capabilities.

In 2017, the landscape of China’s public cloud industry had largely taken shape, with high-quality cloud computing resources accelerating their concentration among top-tier players. As one of the top three public cloud providers in China, Kingsoft Cloud, according to Wang Yulin, will comprehensively expand into multiple vertical sectors to enable more enterprises to benefit from inclusive cloud computing services, leading the entire industry into the intelligent era.