Photo Credit: Gerd Altmann from Pixabay

The global IoT market is expected to grow to $1.386 trillion by 2026 from $761.4 billion in 2020, at a CAGR of 10.5%. China’s Tuya (TUYA), which has pioneered a purpose-built IoT cloud platform, went public earlier this year and continues to expand its presence in the market through partnerships. The recent semiconductor shortage is an area of concern, but Tuya appears to be prepared to handle it.

Tuya’s Financials

For the first quarter of fiscal 2021, Tuya reported revenue of $84.7 million, up 118%. GAAP net loss was $38.1 million, compared to GAAP net loss of $14.7 million a year ago. Non-GAAP net loss per share was $0.07, compared to non-GAAP net loss per share of $0.07 a year ago.

By segment, Tuya reported IoT PaaS revenues of $76.9 million, growing 163.9%, and SaaS and other revenues of $3.4 million, growing 171.4%. Smart device distribution revenues fell 48.1% to $4.4 million. For the third quarter of fiscal 2021, the company expects revenues of $83 million to $86 million.

Tuya’s Expanding Partnerships

Recently, Tuya announced its partnership with CLEANLIFE. As part of the partnership, CLEANLIFE will use Tuya’s low-cost, efficient, and flexible smart light components to launch Wi-Fi and Bluetooth mesh controllable LED strips, LED Panel Lights, LED Smart Bulbs, and other lighting devices. IoT development tools provided by Tuya will help CLEANLIFE to private label an app for customers as well as personalize its user interface.

The partnership will effectively leverage Tuya’s PaaS ecosystem. CLEANLIFE will have the ability to leverage the interconnection and integrated operation with more than 410,000 Powered by Tuya smart devices. Additionally, the 384,000 developers on Tuya’s IoT Platform will become potential supply-chain resources for CLEANLIFE.

Tuya’s platform has seen strong growth of its developer community. As of December 2020, the company had 262,000 active developers. That number has now grown to over 384,000 with over 1,000 open APIs.

The current chip shortage is impacting device manufacturing capabilities globally. To address the challenge, Tuya announced that its nine major product categories are all eligible for the MCU chipset replacement plan. The company plans to replace chips that currently cannot handle a certain degree of high-precision digital to analog conversion and multiplex motor-driven equipment.

Tuya’s MCU chipset replacement strategy will achieve similar functionality to currently unavailable advanced chipsets through a combination of wireless communication chip processing and the functionality of currently available chips.

Tuya went public earlier this year at a list price of $21. It raised $915.4 million through the listing at a valuation of $11.2 billion.

Prior to going public, Tuya had raised $276.8 million in funding from investors including Dragoneer Investment Group, Hillhouse Capital Group, Canada Pension Plan Investment Board, Tengxun Touzi, Tiger Fund, Global Bridge Capital, Quadrille Capital, New Enterprise Associates, Future Fund, and C.M Capital Advisors. Its last funding round was held in March 2021 when it raised $77.3 million.

Its stock is currently trading at around $8.83 with a market cap of $4.8 billion. It had touched a high of $26.65 in May this year, but fell to a low of $8.20 earlier this month. The market turbulence has not helped the stock much.