Megvii raises $750M to expand facial biometrics business ahead of reported Hong Kong IPO

May 8, 2019 | Chris Burt

Megvii has raised $750 million, giving the Face++ biometric facial recognition-maker a valuation of just over $4 billion ahead of an initial public offering planned for later this year on the Hong Kong stock exchange, a pair of sources told Reuters.

The funding round was led by a $200 million contribution from Bank of China Group Investment (BOCGI). BOCGI, which is the private equity division of China’s state bank, declined to comment.

Megvii said in a statement that other participants include Macquarie Group, ICBC Asset Management (Global) and a subsidiary of the Abu Dhabi Investment Authority. A source said that Alibaba Group, an existing investor, also participated. All of the banks and Alibaba declined comment. Megvii had been reported late last year to be in talks with Alibaba for a $500 million finding round.

The statement also says the funds will be used to strengthen the company’s deep learning capabilities, commercialize its AI-based products, recruit talent, and finance global expansion plans.

Reuters reports that data from Refinitiv shows 88 investments in the AI sector totaled $2.1 billion last year, four times more than the previous two years combined.

Megvii was rumored to be considering New York as the venue for its IPO, though Hong Kong was still considered more likely. Now that the company has been accused of contributing its facial recognition technology to a surveillance system targeting the country’s Muslim minority, an IPO in the U.S. seems highly unlikely.