Xiaodu, the Baidu brand behind its DuerOS voice AI and smart device products, has closed an undisclosed Series B funding round, raising its valuation to $5.1 billion. The funding comes shortly after a November Series A round that saw Xiaodu’s valuation rise to $2.9 billion.
Xiaodu combines hardware from smart speakers and smart home devices with DuerOS, which powers the company’s Xiaodu voice assistant. The company’s lineup of voice AI devices and features has expanded at a rapid pace over the past few years, including new headphones, smart displays and smart TVs. The software also underwent a major upgrade to DuerOS 6.0 last fall. The improved platform added support for low-power voice chips, better sound amplification software and natural language understanding, reducing errors by 46%, according to the company. The likely huge investment and subsequent rise in Xiaodu’s valuation is also likely fueled by the company’s expanding user base. Baidu hasn’t updated its numbers for a while, but reported over 500 million devices using DuerOS in 2019 and with 6.5 billion voice assistant requests in March 2020. A deal with Midea , China’s largest smart device maker, to enable Xiaodu’s smart device speakers to control Midea’s more than 70 million devices has no doubt pushed those numbers even higher, although the company noted that smart displays are where it leads in shipments.
“We are excited to see Xiaodu’s rapid growth, leveraging Baidu’s AI and mobile ecosystem of content and services, to change the way hardware delivers value to consumers,” said the Baidu’s chief financial officer, Herman Yu, in a statement. “Xiaodu entered the market in 2018 with smart speakers below 100 RMB and quickly became the world’s largest smart display supplier based on shipments.
Xiaodu’s work since last year’s funding has included lots of updated hardware and new creations like the recent Xiaodu Intelligent Dictionary Pen. Yet as the hardware built by Baidu and its partners becomes more ubiquitous, it’s the apps and services that are beginning to capture a larger share of the company’s revenue.
“DuerOS with voice modality and larger screen is increasing home internet usage and becoming the command center for IoT, with its rapid growth in OEM partnerships,” Yu said. % of Xiaodu’s revenue in the last quarter, encompassing the revenue share of subscriptions, advertising and skill stores.”
We reached out to Xiaodu for more information on the types of services driving the revenue sharing change and how the new funding will be applied. We’ll update this post as we learn more.
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