IPO and $2B funding round could be coming for Chinese AI biometrics unicorns

Megvii is considering making an initial public offering on the Hong Kong stock exchange to raise up to $1 billion in funding for its Face++ facial biometrics and other businesses, a source told Bloomberg.

Deliberations are in an early stage, and it seems other plans are being considered, as Deal Street Asia reported last week that Megvii is in talks with Alibaba to raise at least $500 million, based on a valuation of close to $4 billion. The prospective IPO would be expected to raise between $500 million and $1 billion.

“We are considering many options to raise funds but have not committed to a final plan,” company spokesperson Xie Yinan told Bloomberg in a text message.

Blomberg reports that in addition to providing facial biometrics for Lenovo and Alibaba payments arm Ant Financial, Megvii’s technology has been deployed by the Chinese government to 260 cities, helping police in more than 10,000 arrests.

Megvii recently made its CES debut, showing off Face++ facial recognition and other AI technologies.

SenseTime readies new financing round

Megvii’s top competitor in the Chinese AI facial recognition market, SenseTime, is preparing its own funding round with ambitions to raise up to $2 billion, according to a Bloomberg source.

As with Megvii’s deliberations, the plans are in early stages, and could change significantly, according to the report.

SenseTime picked up more than $1.2 billion in financing in two rounds last year, including a May funding round based on a valuation of more than $4.5 billion. Alibaba led the previous $600 million round. Since then, SenseTime was reported to hold talks with SoftBank Vision Fund about a $1 billion investment.

By expanding its customer base into different industries, SenseTime says it has grown by 400 percent growth in recent years.

The Chinese government is hoping that the country can become the world leader in AI technology by 2030, and along with investments recently appointed an AI ethics committee to support the technology’s development.

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