NetworkNewsWire
Editorial Coverage: Software-as-a-service (SaaS) in China is
one of the fastest-growing industries in the world, and with the
sector poised to
double over the next few years, the boom has just begun. Cloud
infrastructure spending in China increased from about USD $107
billion in 2019 to $142 billion in 2020, surging more
than 32% in the last quarter of the year. China’s accelerating
cloud migration is driven by long-term structural trends in the
digitalization of the country’s economy plus increased business
acceptance of cloud and SaaS solutions, all indicative of massive
sector growth. These drivers, among others, are propelling the
market higher as ever more companies shift to cloud-based
infrastructure to reduce costs and increase revenue as well as
enhance customer service and satisfaction. The process is also
spawning a fusion of SaaS and customer-engagement actions from
passive traditional efforts to proactive artificial intelligence
(AI)-powered SaaS solutions. This is exactly the type of sea-change
coveted by smart money. However, the country’s SaaS market is
extremely fragmented; the top 10 vendors account for only about
35% of total market share. Led by industry visionaries,
Infobird Co. Ltd. (NASDAQ: IFBD) (Profile) is launching the next generation of
SaaS in China to capture a lion’s share of the massive market. With
its past years of operation experiences, the company has served
many leading enterprises in various industries, such as China
Guangfa Bank and multinational ecommerce giant Alibaba
Group Holding Limited (NYSE: BABA). Infobird’s
solutions and product suites have been likened to Zendesk
Inc. (NYSE: ZEN), except that Infobird’s solutions may
appear to be more innovative and focused on proactive client
engagements, which is to ultimately empower customers to increase
sales. Other notable cloud-based SaaS companies include Twilio
Inc. (NYSE: TWLO), an American cloud communications
platform as a service company, and Salesforce.com Inc. (NYSE: CRM), the
world’s predominant customer-relationship management ("CRM")
platform.
- CMIT projects that China’s cloud market will experience a
dazzling 30% compound annual growth rate through 2023.
- IFBD is one of few SaaS companies in China with capability to
transition to standard SaaS business model.
- Infobird is the only known player in China that owns, applies
cloud-native architecture in customer engagement.
- Company’s strategic vision is to capitalize on massive digital
transformation sweeping across China.
Click here to view
the custom infographic of the InfoBird
editorial.
The SaaS Tsunami
Beyond structural trends and increased business acceptance of
cloud services, the Chinese government also advocates for cloud
adoption, issuing Guidelines for Promoting Enterprises to Move
Business to Cloud Platforms in 2018. Cloud migration also
accelerated with the emergence of COVID as work became remote. One
million new Chinese companies planned to conduct business with
cloud computing services last year alone. A transformational
disruption is underway, evidenced by the CMIIT forecast that
China’s cloud market would experience a dazzling 30% compound
annual growth rate through 2023.
Even that stellar forecast could be a low estimate. As the idea
of digital transformation sinks in and rises to become the hottest
topic across industries in China, mid-to-large and leading
enterprises in various industries have a high tendency to try out
new digital and cloud-based solutions such as customer-engagement
solutions, enterprise resource planning (also known as ERP
solution) and operation solutions. At the same time, well over 90%
of companies in China are still small- to medium-sized enterprises
(SMEs), which contribute roughly 60% to China’s GDP. Normally SMEs
don’t have sufficient cash reserves to invest in hardware and
software upgrades, but millions of SMEs can afford the SaaS
subscription model to improve their customer service, reduce costs
and increase revenues.
This together represents an enormous underserved and untapped
market, while tapping this burgeoning market also presents a real
challenge for most SaaS companies in China. Chinese SaaS companies
face challenges on how to achieve better balances on the
mid-to-large enterprises and SME markets, as mid-to-large
enterprises tend to have various customization needs but with
potentially larger and more stable revenue contribution to the
company, while SMEs mean smaller and less stable revenue
contribution but also lower customization needs. Yet the market is
there, and whoever can best solve this balance dilemma and quickly
expand the market with standardized solutions will emerge as the
next industry leader.
Riding the Wave
Infobird
Co. Ltd. (NASDAQ: IFBD) is one of the
few SaaS companies in China that has the capability to transition
into a standard SaaS business model and to serve both the
mid-to-large enterprises and SMEs under its standardized platform
by leveraging its no-code development platform. A leading SaaS
provider of patented, innovative AI-powered, customer-engagement
solutions in China, the company earned its stripes by creating and
delivering customized SaaS solutions for some of the largest
commercial banks in the nation. Coming off a successful IPO,
Infobird is now expanding its target market and rolling out
standardized SaaS modules to service a myriad of other
enterprises.
Infobird started on a small scale more than a decade ago by
developing experimental cloud call center as well as intelligent
telemarketing services to various clients, including Alibaba Group
Holding Limited (NYSE: BABA) and the credit card division of China
Guangfa Bank, one of the largest commercial banks in the country.
Infobird’s long-term services with China Guangfa bank’s credit card
center further consolidates and proves its capability on supporting
ultra-large concurrence of agents with high security and service
level. As the relationship grew, so did Infobird’s experience
and expertise in developing and delivering the best-class customer
engagement SaaS solutions, which becomes the foundation for the
company to develop its standardized SaaS services.
Infobird continued expanding and currently services various
customers in the finance, education, public services, healthcare
and consumer products industries. As Infobird grew, the company
remained laser focused on research and development of new products
and services, culminating in an intellectual property portfolio
that currently consists of 19 patents and 51 software copyrights.
The company remains committed to innovation; its R&D team
accounts for about 40% of employees as of December 2020.
Now, leveraging its proficiency, R&D activities and half of
its IPO proceeds, Infobird is undergoing the transition to
providing more standardized SaaS services to both mid-to-large
enterprises and the millions of SMEs in various industries across
China. One key message to deliver is that, with currently developed
standardized SaaS modules and its self-developed, no-code
development platform, Infobird can quickly develop new SaaS modules
with preprogrammed microservices at extremely low cost and rapidly
react to shifting market demands and opportunities. It can
therefore serve mid-to-large enterprises clients without any
customization cost, get to market quickly and maintain its
standards of excellence.
With a solid revenue base and well-established proven
architecture in place, Infobird is creating high barriers to entry
not easily emulated by competitors. The new standardized SaaS
modules deliver tangible value for both mid-to-large enterprises
and SME end users by resolving business pain points and generating
more business opportunities. Infobird’s standardized SaaS solutions
are fast and easy to roll out, and the company expects to scale
quickly. As the roll out picks up steam, it can’t be overlooked
that Infobird’s products are highly profitable software-based
subscriptions, and the company expects to maintain 65% gross
margins well into the future.
More Than Most
Infobird is the only known player in China that owns and applies
cloud-native architecture in customer engagement industry that can
fully release the power of cloud computing by ensuring flexible
scale-out capabilities on a module basis. The company also has
higher tolerance of failures and default capability and can support
potentially unlimited concurrence of agents on the same platform,
with enough resources supplied. The company also has self-developed
and patented AI technologies such as natural language processing
("NLP") and an innovative no-code development platform.
With its self-developed and patented products, Infobird is one
of only a handful of SaaS companies in China that has provided
customer engagement, CRM and call center expertise to large,
demanding enterprises. In addition, Infobird’s platform maintained
exceptional service and security levels. Few can compete with
Infobird’s level of proficiency.
What’s more, unlike traditional CRM, Infobird’s
customer-engagement software provides both AI customer engagement
and AI Salesforce management. More robust and intuitive, customer
engagement is next-generation CRM. The traditional CRM system is
designed to passively track, monitor and analyze the operation of
sales activities. It, therefore, cannot match up to today’s
digitalized customer-interaction world.
The modern customer-engagement industry is, by nature, a “system
of engagement,” which focuses on the active, ongoing engagement
with customers by leveraging a broad range of applications,
including omnichannel communication solutions, AI voice/text
chatbots, intelligent quality inspection, and more. This modern
approach is aimed at helping InfoBird’s clients to increase their
interaction efficiency and effectiveness with their end customers
at low cost and, ultimately, to increase revenue for its
clients.
The Push Forward
Recognizing the enormous opportunity, Infobird founder, chair
and CEO Yimin Wu laid out a simple, strategic vison for the
company: transform Infobird from the customized SaaS model to
standardized SaaS and capitalize on the massive digital
transformation sweeping across China. To push the shift faster and
achieve his objective, Wu launched Infobird’s
IPO on April 20, 2021, resulting in gross proceeds of USD $25
million.
"We dream of letting the light of science and technology
illuminate every corner of the business world,” said Wu.
“Therefore, we choose to be listed on NASDAQ. We must accelerate
development with a global vision. The IPO is not the end, it is a
new starting point, and it means more opportunities and bigger
responsibilities. In order to achieve new growth, we will face more
tests and challenges in the future. Maybe Infobird will go through
revolutions, but our mission to make customer engagement smart will
not change."
Beyond the success of the public offering, other important
factors from the IPO are noteworthy, including comps to SaaS peers.
At current levels, Infobird trades at a deep discount to peers
based on price-to-sales (P/S) ratios. Price-to-sales is a valuation
metric calculated by dividing market capitalization by total
revenue in the most recent year. High ratios suggest overvaluation,
and low ratios indicate undervaluation. Recently, IFBD’s P/S
was under 6, Twilio was 35 and Zendesk 17. The P/S ratios show that
IFBD trades three to five times less than many SaaS comps,
indicating it is undervalued at current levels.
Another important factor worth noting is the planned use of IPO
proceeds. Infobird has allocated 24% of proceeds for further
research and development, 26% for working capital, and 50% is
dedicated to sales and marketing. This allocation is a clear
reflection of Infobird’s longstanding commitment to innovation and
clearly signals the company’s hard push forward and well beyond
standardized SaaS. Infobird recognizes that China is the next
frontier in the SaaS revolution and intends to aggressively capture
market share, enter a new phase of high-speed growth and emerge as
the market leader.
SaaS Apostles
Alibaba
Group Holding Limited (NYSE: BABA) is a client that
Infobird has served in the past. Also known as
Alibaba Group and Alibaba.com, this Chinese multinational
technology company specializing in e-commerce, retail, internet and
technology. The company is the leading platform
for global wholesale trade and offers several software products
produced through a wholly owned subsidiary, Alibaba Software.
Alibaba is currently one of the top three Infrastructure as a
Service (IaaS) suppliers in the world through its Alibaba Cloud
subsidiary.
Zendesk
Inc. (NYSE: ZEN) is a service-first CRM company that
builds software designed to improve customer relationships. Zendesk
started the customer experience revolution in 2007 by enabling any
business around the world to take its customer service online.
Today, Zendesk is the champion of
great service everywhere for everyone, and powers billions of
conversations, connecting more than 100,000 brands with hundreds of
millions of customers over telephony, chat, email, messaging,
social channels, communities, review sites and help centers.
Twilio
Inc. (NYSE: TWLO) is an American cloud communications platform as a
service company based in San Francisco, California. Twilio allows
software developers to programmatically make and receive phone
calls, send and receive text messages, and perform other
communication functions using its web service APIs. Twilio has
democratized communications channels such as voice, text, chat,
video, and email by virtualizing the world’s communications
infrastructure through APIs that are simple enough for any
developer to use, yet robust enough to power the world’s most
demanding applications.
Salesforce.com Inc. (NYSE: CRM) is an
American cloud-based software company headquartered in San
Francisco, California. It provides customer relationship management
service and provides a complementary suite of enterprise
applications focused on customer service, marketing automation,
analytics and application development. Salesforce is the world’s
number-one customer relationship management ("CRM")
platform.
There’s no question that a massive digital transformation is
sweeping across China and that SaaS is integral to the process.
This transformation presents unparalleled opportunity for select
SaaS companies, and smart money has taken notice.
For more information about the company, visit Infobird
Software Co.
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