Hong Kong – Recently, TickerWin, the leading market research firm, has released a research report “VIYI Algorithm, with Leading Customized Central Processing Algorithm Services, Its Annual Revenue Increased by 176.8% “. The central processing algorithm service is a service based on a series of algorithms including analytical algorithms, recommendation algorithms and acceleration algorithms, which can empower downstream industries with higher demand for data analysis and computing power optimization, and apply to internet advertising, internet game applications, finance, retail, logistics and other industries. In view of huge downstream demands, the overall market of central processing algorithm services is huge. Major players in the central processing algorithm service industry include digital marketing service providers, online game service providers and algorithm solution service providers.
With the rapid development of the computer industry and the internet industry and the increase of internet penetration rate in China, the number of internet users and internet data in China have increased significantly. The internet industry is the largest application industry for central processing algorithm services, and internet applications’ demand for computing power are increasing.
According to the report,VIYI Algorithms, Inc. (” VIYI Algo “), a Cayman Islands exempted company operating in China, announced that it would go public through a merger with Venus Acquisition Corporation, a special purpose Acquisition Company (SPAC). In connection with the transaction, VIYI algorithms is valued at $400 million. Upon completion of the transaction, Venus will be renamed MicroAlgo Inc. The listing merger will be completed in the third quarter of 2021.
VIYI is dedicated to the development and application of bespoke central processing algorithms. VIYI provides comprehensive solutions to customers by integrating central processing algorithms with software or hardware, or both, to streamline their digital services for end-users or technological development purposes, thereby helping them increase the number of customers, improve end-user satisfaction, achieve direct cost savings, reduce power consumption, and achieve technical goals. The range of VIYI’s services includes algorithm optimization, accelerating computing power without the need for hardware upgrades, lightweight data processing, and data intelligence services. VIYI’s ability to efficiently deliver software and hardware optimization to VIYI’s customers through bespoke central processing algorithms serves as a driving force for VIYI’s long-term development.
VIYI’s total revenues increased by approximately RMB 196.6 million, or 176.8%, from approximately RMB 111.2 million for the year ended December 31, 2019, to approximately RMB 307.8 million (USD 47.2 million) for the year ended December 31, 2020, due to an increase of approximately RMB 38.6 million (USD 5.9 million) in central processing algorithm service revenue, and an increase of approximately RMB 158.0 million (USD 24.2 million) in intelligent chips and services revenue. Approximately 78.6% of the increase in intelligent chips and services revenue was due to the acquisition of Fe-da Electronics.
VIYI generates revenues when VIYI completes its performance obligation to deliver related services based on the specific terms of the contract, which are commonly based on a specific action, e.g., cost per impression (“CPM”) for online display. Over 90% of VIYI’s contracts with these customers are based on the CPM charging model. Revenues generated from mobile games include royalty payments from licensee operators of VIYI’s mobile games and fees collected from game developers for using VIYI’s game portal. VIYI’s central processing algorithm services revenue increased by approximately RMB 38.6 million, or 34.7%, from approximately RMB 111.2 million for the year ended December 31, 2019, to approximately RMB 149.8 million (USD 23.0 million) for the year ended December 31, 2020. This increase was primarily attributable to the rise in the number of impressions as a result of improvement from VIYI’s algorithm solution.
Intelligent chips and services revenues include revenues generated from the resale of intelligent chips. VIYI generates revenues when the control of products is transferred to customers, as evidenced by customers’ signed acceptances. VIYI also generates revenues from software development. VIYI designs software for central processing units based on customers’ specific needs. Revenues from software development are recognized over time during the development period.
VIYI started generating revenue from the resale of intelligent chips and related software development in September 2020 and also through our acquisition, which amounted to approximately RMB 158.0 million (USD 24.2 million) for the year ended December 31, 2020. VIYI expects that as the demand for custom optimizations by way of VIYI’s proprietary algorithms grows, VIYI’s intelligent chips and services revenue will continue to grow. For semiconductor application solutions related to algorithm optimization, VIYI plans to combine algorithm optimization application demand scenarios, provide corresponding central processing algorithm solutions to meet market demand, and promote the application and popularization of algorithm optimization technology in the semiconductor field.
Market leader in cutting edge technology protected by intellectual property rights
The CIC Reports indicates that VIYI is the market leader in terms of the quantity of intellectual property. As of May 25, 2021, VIYI owns 370 proprietary intellectual property rights, which include 273 copyrights of which 270 are software copyrights, 37 patents, 23 registered trademarks, 18 exclusive rights for the layout design of integrated circuit, and 19 domain names. The large quantity of intellectual property at VIYI’s disposal as compared to VIYI’s competitors exemplifies VIYI’s commitment to research and development and long-term development.
VIYI leverages its fixation on staying in the forefront of technological development to help customers explore solutions and needs that are yet to be identified. VIYI then provides proprietary central processing algorithm solutions to meet those needs.
There are other companies addressing various aspects/verticals of the central processing algorithm service market in the PRC. The central processing algorithm service market is highly fragmented and evolving. With respect to VIYI’s central processing algorithm services, VIYI competes against other companies engaged in similar services like VIYI.
VIYI believes the principal competitive factors in VIYI’s market are:
• service and products features and functionality;
• capability for customization, configurability, integration, security, scalability, and reliability;
• quality of technologies and research and development capabilities;
• ability to innovate and rapidly respond to customer needs;
• the breadth of use cases supported;
• diversified customer base;
• relationships with key participants in VIYI’s customers’ industry verticals;
• sufficient capital support;
• platform extensibility and ability to integrate with emerging technologies such as AI and cloud computing; and
• brand awareness and reputation.
VIYI believes it competes favorably on the basis of the above factors; however, VIYI expects competition to intensify in the future. VIYI’s ability to remain competitive will largely depend on the quality of its applications, the effectiveness of VIYI’s sales and marketing efforts, the quality of VIYI’s customer service, and VIYI’s ability to acquire or develop complementary technologies, products, and businesses to enhance the features and functionality of VIYI’s applications.
China’s increased demand for central processing algorithm services in internet advertisement and the online game industry
Effective central processing algorithm solutions can empower downstream industries experiencing high demand for data analysis and computing power optimization, which applies to internet advertising, internet game applications, finance, retail, logistics, and other industries. Because of huge downstream demands, the overall market of central processing algorithm services is enormous.
According to the CIC Report, revenue of central processing algorithm services derived from internet advertisement and online gaming alone has grown from RMB 2.2 billion in 2016 to RMB 6.9 billion in 2020, representing a CAGR of 32.7%. This market is expected to maintain a rapid growth trend, expanding at a CAGR of 15% during the period from 2020 to 2025. VIYI believes that its position as an industry leader in a fast-growing market with favorable industry trends will greatly benefit VIYI in achieving sustainable and rapid growth in the future.
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