LightOn, a French start-up specializing in artificial intelligence, is about to mark a historic turning point. A strategic IPO on Euronext Growth is anticipated to support its transformation towards a SaaS-based business model. *The aim is to raise 10 million euros* to strengthen its commercial and international capabilities, while consolidating its position in the generative AI markets. This paradigm shift in its financing reflects a desire to establish LightOn as a transatlantic leader in artificial intelligence solutions. *The company aims for a turnover of 40 million euros by 2027*, attesting to its ambitious and calculated growth.
A significant initial public offering
The French start-up LightOn, specializing in artificial intelligence, has recently submitted its registration document for a listing on Euronext Growth. This decision marks a desire to diversify its sources of funding, moving away from the venture capital financing traditionally favored in the AI sector. This strategic approach aims to strengthen the company’s position in the generative AI market.
Evolution of the business model
Since its creation in 2016, LightOn has explored various business models and sources of funding. In 2018, it raised 2.9 million euros to develop its optical processor technology. The company has also benefited from public grants, but these have significantly decreased, from 644,000 euros in 2022 to 148,000 euros in 2023.
Successful transition to a SaaS model
LightOn has historically based its business strategy on its Forge solution, offering customized AI solutions. However, with the launch of its new platform Paradigm, the start-up aims for a transition to a SaaS model. This allows for more predictable revenues through annual licenses. The Paradigm platform integrates advanced language models tailored to the specific needs of companies.
Financial performance and outlook
The financial performance of LightOn has fluctuated. In 2023, the company achieved a turnover of 7.966 million euros, which fell to 614,000 euros by June 30, 2024. Despite this, the start-up shows a solid foundation with 0.9 million euros in annual recurring revenue (ARR) generated by four clients by the end of July 2024.
Ambitious forecasts for 2027 indicate a turnover of 40 million euros and an EBITDA of 16 million euros. The commercial conquest strategy focuses on five key sectors: banking, insurance, health, defense, and the public sector.
Fundraising objectives
As part of its IPO, LightOn aims to raise around 10 million euros. These funds will primarily be allocated to expanding its Paradigm model, notably through the recruitment of sales and marketing teams. This step is crucial to enhance its capacity to develop new features and improve its computing power.
Strategic partnerships for development
The start-up has established partnerships with renowned companies such as Orange Business and Hewlett Packard Enterprise. These collaborations aim to boost commercial development and increase LightOn’s visibility in the European and Middle Eastern markets. The goal is to have at least one commercial office in these regions by 2025.
A promising ESG evaluation
LightOn has an ESG rating of 50/100, above the average for its sector, according to the analysis by EthiFinance. This evaluation highlights the company’s commitment to sustainable and responsible practices, thus enhancing its attractiveness to investors.
A bold bet
While other players in the sector, such as Mistral AI, have raised substantial amounts, LightOn is heading towards an IPO valued at 10 million euros. This quest for independence through public financing could prove to be bold and innovative in a dynamic and competitive sector.
Common questions about LightOn and its IPO
What is the main reason for LightOn’s IPO?
LightOn aims to raise around 10 million euros to finance the commercial development of its new Paradigm platform and strengthen its sales and marketing teams.
Which sectors does LightOn target in its post-IPO development strategy?
LightOn targets five priority sectors for the adoption of generative AI: banking, defense, health, industry, and the public sector.
What business model has LightOn chosen for its future?
LightOn opts for a SaaS (Software as a Service) model, aiming to increase its recurring revenues and make its cash flows more predictable.
What is LightOn’s financial goal by 2027?
The start-up aims to achieve a turnover of 40 million euros and an ARR of approximately 35 million euros by 2027.
How does LightOn plan to differentiate itself from its competitors in the market?
LightOn focuses on its ability to attract talent and continuously improve its solutions while developing strategic partnerships with companies like Orange Business and Hewlett Packard Enterprise.
What financial challenges does LightOn face before its IPO?
LightOn has experienced a significant drop in its turnover, declining from 7.966 million euros in 2023 to 614,000 euros by June 30, 2024, and a negative EBITDA of -2.378 million euros, which could raise concerns among investors.
What commitment has already been secured for LightOn’s IPO?
LightOn has already secured a commitment of 3 million euros from Axon Partners Group, representing about 30% of the targeted capital increase.
How does LightOn plan to expand its activities internationally?
The company plans to have at least one representative in four European countries and a commercial office in the Middle East by the end of 2025 to strengthen its presence in international markets.
What ecological and governance issues have been raised by LightOn before its IPO?
LightOn boasts an ESG rating of 50/100, which is quite high compared to industry norms, and this could attract investors concerned about environmental and governance issues.
