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par LIGHTON

LIGHTON announces the launch of its IPO on the Euronext Growth market in Paris.

LIGHTON
LIGHTON announces the launch of its IPO on the Euronext Growth market in Paris.

08-Nov-2024 / 07:00 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.


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Press release                          
Paris, 8 November 2024

LIGHTON ANNOUNCES THE LAUNCH OF ITS IPO ON THE EURONEXT GROWTH® MARKET IN PARIS
 
  • A capital increase of around €10.4 million, which could amount to €11.9 million if the extension clause is exercised in full and to €13.5 million if the over-allotment option is exercised in full (the “Offer”)
  • 3 million already secured in the form of subscription commitments from cornerstone investors, representing around 30% of the base deal
  • Subscription price of the new shares: €10.35 / share
  • Subscription period: 8 to 20 November 2024 inclusive for the Public Offer (5 p.m. for over-the-counter subscriptions and 8 p.m. for online subscriptions) and until 21 November 2024 (12 p.m.) for the Global Placement
  • Settlement-Delivery on 25 November 2024 and start of trading on 26 November 2024
  • Securities eligible for PEA and PEA PME-ETI equity savings plans, income tax reduction of 18% for subscription to the share capital of SMEs, the scheme of reinvesting capital gains, and "Innovative Company" classification by Bpifrance[1]


LightOn (the “Company”), a leading European player in generative AI for businesses[2], announces the launch of its IPO on the Euronext Growth® market in Paris (ISIN code: FR0013230950 – Ticker: ALTAI-FR).
On 7 November 2024, the French financial markets authority (Autorité des Marchés Financiers - AMF) approved the Prospectus under number 24-475, comprising the Registration Document, approved on 21 October 2024 under number I.24-012, supplement to the registration document approved on 7 November 2024 under number 24-015, a Securities Note and the Prospectus Summary (included in the Securities Note and appended to this press release). These documents are available free of charge and upon request from the Company (2 Place de la Bourse, 75002 Paris, France) and on the websites of the company (https://investir.lighton.ai) and the AMF (https://www.amf-france.org).
 
Igor Carron and Laurent Daudet, co-CEOs and co-founders of LightOn, comment:
“LightOn's IPO would mark a major milestone in our growth trajectory and settle our position as a benchmark player in generative AI in Europe[3].
This planned IPO offers investors a unique opportunity to participate directly in the growth of a French technology champion[4] that is already successfully deploying its AI solutions with major groups in France and abroad.
As the first listed European company specializing in generative AI, LightOn is paving the way for a new technological era. We hope that many of you will take part in this revolution, which is pushing back the frontiers of what is possible and profoundly transforming business practices.”

Generative AI: an in-depth transformation of business practices
Generative AI will disrupt the business world. From services to industry and trade, all sectors will be affected by the numerous benefits provided.
According to McKinsey, the potential productivity gains enabled by generative AI will automate nearly half of the hours worked in Europe and the United States by 2035.[5] A new era is opening up for companies that want to offer their employees a way to reinvent work.
The promises of generative AI are huge and the global market is gigantic, estimated at more than $1.3 trillion in 2032[6].

LightOn, a leading European player in generative AI for businesses[7]
Founded in 2016 by Igor Carron and Laurent Daudet, two experts with background in top-level French and American academic research and with experience in the world’s largest engineering sciences laboratories, up until 2020 LightOn developed an optical processor (Optical Processing Unit) designed to rapidly process data in AI applications, with low energy consumption.
Focused on generative AI since 2020, LightOn has designed 12 Large Language Models (LLMs) in only four years, capable of working with more than 100 billion parameters, thanks to its ability to access European supercomputers and the computing power of cloud giants, making the Company one of the few players in the world with this technological capacity. LightOn has also developed generative IA functionalities combined with these LLM.
During this period, LightOn has also structured its workforce with 41 employees to date, two-thirds of whom are dedicated to technology and one-third dedicated to accelerating the marketing of its solutions used by top-tier private and public businesses. In addition to the management team, all of LightOn’s employees – who are highly qualified (11 PhDs) and multicultural (10 nationalities) – contribute to the success of its developments and solutions thanks to their complementary skills.

Forge and Paradigm: sovereign and tailored solutions
LightOn has developed and markets two software solutions.
Forge, marketed since 2022, is a technological support for a customized generative AI aimed at companies and organizations who want to develop their own language model, improve an existing language model or integrate new technological building blocks like RAG[8] or agents.
Paradigm, marketed in 2024, is a ready-to-use generative AI platform designed to meet all the needs of businesses and the public sector. It harnesses the power of generative AI to optimize and enhance business productivity by automating various business processes. This software platform stands out through its customization capabilities, user-friendliness, and powerful features, enabling rapid integration within organizations. As a complete turnkey solution, Paradigm is built on an advanced architecture that combines a LLM with multimodal Retrieval-Augmented Generation (RAG), allowing intelligent interaction with the company's document corpus through natural language queries. Furthermore, it includes highly specialized intelligent agents capable of autonomously creating and managing complex workflows, such as responding to requests for proposals.

Solutions already marketed directly to major accounts in France, in the United States and in EMEA
In 2023, Forge was rolled out to several major organizations, including a Silicon Valley company in the United States developing medical assistant AI that used LightOn’s bespoke technological support to build its first LLM prototype, to run its virtual health workers, in four months. Forge was previously deployed at a research institute in EMEA.
In 2024, Paradigm has also been adopted by businesses, with numerous major French accounts already deploying the solution, convinced by its capabilities, in an initial test and evaluation phase (POC – proof of concept). Notable clients include: the Ile-de-France region, Safran, Groupama, the French General Directorate of Public Finance, CNES (French Space Agency), French Space Command and Verlingue. The first production implementations and full-scale deployments following certain POCs are scheduled by the end of 2024.

Strategic partnerships to boost sales efforts through indirect channel
In addition to its direct approach, which has already won over numerous companies, LightOn has secured two strategic partnerships in the first half of 2024 with major hardware players to combine its generative AI software solution with their cloud or hardware offerings:
  • Orange Business (30,000 corporate clients worldwide): a comprehensive offering covering the entire lifecycle of generative AI projects, combining LightOn’s Paradigm software platform with Hewlett Packard Enterprise servers and Orange Business’s very high bandwidth hosting in its French data centers. Alexandre Bord, Key Account Director at Orange Business, states regarding this partnership: "We are extremely confident about the future of our relationship with LightOn. We have signed several orders worth multiple millions of euros since March [for Orange Business]." ;
  • Hewlett Packard Enterprise (27,000 corporate clients worldwide): integration of Paradigm with Hewlett Packard Enterprise servers, enabling rapid adaptation of generative AI to business use cases.
This indirect sales model will leverage these partners’ sales force, who will market a complete, integrated solution combining software and hardware to their corporate clients. This translates into a potential of millions of individual users within these corporate clients.  

A committed approach to corporate social responsibility
LightOn has taken a proactive approach to corporate social responsibility (CSR). This commitment is illustrated in the 50/100 rating issued by the extra-financial rating agency EthiFinance in May 2024, a level of performance described as “advanced”. With this rating, LightOn is more than six points ahead of the average for comparable companies in terms of headcount and business sector.

Two strategic pillars for acceleration: Business development and international expansion
Driven by its ambition to position itself among the leading players in generative AI by being among the first to benefit from the generative AI market takeoff, LightOn has defined an ambitious development strategy centered around two key priority areas:
  • Accelerate business development in the most promising markets. LightOn has identified 5 priority vertical markets that are likely to adopt generative AI faster than others: banking-insurance, defense, healthcare, industry and the public sector as they handle large volumes of data and their regulatory and sector-specific requirements make them particularly sensitive to data confidentiality issues. To achieve this, LightOn will leverage both direct and indirect sales channels, through strategic partnerships with Infrastructure and IT hardware providers such as Hewlett Packard Enterprise, Cloud providers like Orange Business, and IT Services companies, to optimize its sales efforts.
  • Expand internationally. To seize all opportunities arising from the global excitement around generative AI, LightOn has identified two priority regions in which the Company intends to expand: (i) Europe, where LightOn is already recognized and aims to have at least one representative in four countries by the end of 2025, (ii) the Middle East , which aspires to position itself at the heart of the global AI ecosystem  and where LightOn plans to open a commercial office by the end of 2025.

2027 ambition: achieve revenue of c. €40m, an ARR of c. €35m and an EBITDA margin of around 40%
While LightOn has historically achieved a significant share of its revenue from its Forge solution, its commercial development strategy for its Paradigm solution is driven by very strong demand from companies for generative AI. Paradigm, launched in end-2023, is currently in the testing and evaluation phase in French public and private companies. These organizations are expected to quickly initiate the first production releases and full-scale deployments by late 2024.
The marketing of the Paradigm solution in the form of an annual renewable or multi-year non-renewable software license should ensure both visibility and recurrence of the majority of LightOn’s revenues. LightOn benefits from a revenue base already embedded until 2027 via its already sold multi-year licenses.
Marketing of the Forge solution, essentially linked to the implementation of tailored projects with high technological expertise, makes it possible to generate additional revenues that are less recurring but individually higher.
Following a 2023 year that benefited from Forge contracts, enabling the company to generate revenue of €8m and achieve profitability, LightOn has evolved its sales model and revenue structure in 2024 towards SaaS license revenues generated from its Paradigm offering.
This model transition, which will temporarily impact revenue during the fiscal year while building a foundation of recurring revenue, is already showing positive results with accelerating commercial momentum month after month. Indeed, with 4 clients already secured as of July 31, 2024, representing an ARR of €0.9m, LightOn aims to double this ARR by the end of 2024 to reach approximately 10 clients[9].
For 2025, LightOn aims to accelerate revenue growth, with a strong contribution from Paradigm and an additional contribution from Forge, allowing LightOn to aim an ARR at the end of the fiscal year of c. €6m.
In 2026, LightOn aims to generate positive EBITDA and free cash flow.
From 2027, the acceleration should be even more marked with a revenue target of c. €40m, an ARR of c. €35m at the end of the fiscal year, around two-third of which to be generated by indirect sales of Paradigm via strategic partners, combined with an EBITDA margin of around 40%.
These targets are expressed at constant scope.

An IPO on Euronext Growth Paris to accelerate growth
LightOn's planned IPO on Euronext Growth® Paris aims to provide the Company with the additional financial resources required to implement the key strands of its development strategy so that it can step up growth and reach its targets.
As such, the net proceeds from the funds raised under the Offer of approximately € 10.4 million, i.e. net proceeds of approximately € 8.7 million (based on full subscription and before exercise of the extension clause and over-allotment option), which may be raised to around €11.9 million (after full exercise of the extension clause) and to around € 13.5 million (after full exercise of the extension clause and the over-allotment option), will be allocated as follows, after full repayment (principal + interest) of 2018 convertible bonds:
  • around 60% of the net proceeds, post repayment of the 2018 convertible bonds, to invest in the company's development: expansion of the sales and marketing force, associated sales expenses, recruitment of engineers, etc;
  • around 40% of the net proceeds, post repayment of the 2018 convertible bonds, to finance technological investments: development of new Paradigm functionalities (agent development, multimodal RAG capabilities, etc.), fine-tuning of specialized models dedicated to priority sectors and geographies, purchase of computing power for R&D purposes.
In the event that the Offer is only 75% subscribed, on the basis of the Offer Price, the funds raised, post repayment of the 2018 convertible bonds, would be allocated to finance investments in the development of the Company's structure (around 60% of the net proceeds of the funds raised) and to finance technological investments (around 40% of the net proceeds of the funds raised). In such case, the Company would still expect to meet its objectives.

Subscription commitment of € 3m
LightOn received subscription commitment of € 3 million from Axon Partners Group, representing approximately 30% of the base deal.


Main terms of the transaction
  • Indicative timetable
 
7 November 2024Approval of the Prospectus by the AMF
8 November 2024Opening of the Public Offer and the Global Placement
20 November 2024Closing of the Public Offer at 5 p.m. via OTC and at 8 p.m. via internet
21 November 2024Closing of the Global Placement at 12 p.m.
Press release announcing the result of the Offer
25 November 2024Settlement-Delivery of the Offer
26 November 2024Start of trading on the Euronext Growth Paris market
Start of possible stabilisation period
19 December 2024Deadline for exercising the Over-allotment Option
End of possible stabilisation period
 
  • Share capital before the transaction
€ 48,569.66 euros divided into 4,856,966 shares with a par value of € 0.01 including 838,461 preference shares converted into ordinary shares in the framework of the transaction.
 
  • Characteristics of the shares
  • Name: LightOn
  • Ticker: ALTAI-FR
  • ISIN: FR0013230950
  • Listing market: Euronext Growth® Paris
  • ICB classification: 10101015 - Software
  • LEI Code: 9695002GVC14VHLFIH85
Securities eligible[10] for PEA equity savings plans and PEA “PME-ETI” equity savings plans, income tax reductions for subscribing to the share capital of SMEs, the scheme of reinvesting capital gains (Article 150-0 B ter of the French General Tax Code) and "Innovative Company" classification by Bpifrance.
 
  • Subscription price of new shares
10.35 per new share (€ 0.01 nominal value and €10.34 issue premium) to be paid up in full in cash at the time of subscription.
 
  • Number of shares offered
1,000,000 ordinary new shares to be issued in connection with a share capital increase in cash, which may be increased to:
  • 1,150,000 new shares in the event of the full exercise of the extension clause ("additional new shares");
  • And to 1,306,000 new shares in the event of the full exercise of the over-allotment option ("supplementary new shares").
 
  • Structure of the Offer
An offering to the public in France in the form of a firm price offer (the “Public Offer”), mainly intended for private individuals, where:
  • the orders will be broken down according to the number of shares requested: order fraction A1 (from 1 share up to 250 shares) and order fraction A2 (over 250 shares);
  • the A1 order fractions will receive preferential treatment relative to the A2 order fractions in the event that all orders cannot not be entirely satisfied.
A global placement primarily intended for institutional investors (the “Global Placement”) involving a private placement in France and an international private placement in certain countries (with the notable exceptions of the United States of America, Canada, Australia and Japan).
If permitted by the request expressed under the Public Offer, the number of shares allocated in response to orders issued under the Public Offer will be at least equal to 10% of the number of shares offered under the Offer (before any exercise of the extension clause and the over-allotment option).
 
  • Gross transaction amount
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