Megvii gets green light for $500 million Hong Kong IPO
Chinese artificial intelligence unicorn Megvii received a green light from the stock exchange for $500 million Hong Kong IPO, Reuters writes. Founded in 2011, Megvii developed the facial recognition platform Face++.
In November, the IPO was delayed after regulators in Hong Kong demanded more information when the International Consortium of Investigative Journalists found leaked documents linking the company’s biometric facial recognition technology to systematic Chinese government surveillance and oppression of the Muslim minority in China’s Xinjiang Province.
This news came a month after the U.S. administration included Megvii on its Entity List, alongside 27 other Chinese facial recognition and biometric surveillance companies such as Dahua, Hikvision, iFlytek, SenseTime, and Yitu, for alleged involvement in human rights violations in the Xinjiang Uighur Autonomous Region. As a result, the companies are banned from purchasing American products, having them in their supply chain, or maintaining relations with U.S. companies.
In October Megvii faced a re-evaluation by Goldman Sachs of its sponsorship of its IPO. At the time, Megvii did not comment on Goldman Sachs Group’s statement, but said it “strongly objects” and that a previously report released by Human Rights Watch (HRW) accusing it of similar actions was deemed incorrect and the company’s name was cleared.
Megvii filed for public listing on Aug. 25, and although the Hong Kong Stock Exchange has six months to list, a three-month extension can still be applied for if the deadline passes.
Sources report the company is waiting for the Chinese New Year to pass before it can establish a time table for the deal (Jan. 25).
In May, the company raised $750 million and drew the attention of a number of investors including Australian investment bank Macquarie Group and the Abu Dhabi Investment Authority.