Megvii registers major biometrics revenue fall following U.S. trade blacklist
Chinese AI company Megvii suffered a major blow in terms of revenue after it was included on the U.S. trade blacklist last year in October, alongside Huawei, SenseTime and other biometric technology developers, Bloomberg reports.
While in the first half of 2019 it tripled its sales, Megvii registered only a 2.7 percent revenue growth in the second half of 2019. Compared to its annual sales target, the company allegedly was behind by 28 percent, respectively 2.9 billion yuan (US$409 million). The company ended up halting a number of operations such as orders and shipments that could violate the blacklist. Following COVID-19, Megvii is now developing temperature detection solutions.
In February, Megvii announced it would refile for its lapsed blockbuster biometrics IPO in Hong Kong, after its plans were affected by U.S. sanctions. Both Megvii and fellow facial recognition provider SenseTime had been among the fastest growing startups in China prior to the sanctions announcement, according to the report.
Megvii was last valued at nearly $4 billion, with most of its revenue resulting from partnerships with government agencies, public safety and traffic management. According to its August IPO documents, Megvii claims smart city sales went up by 270 percent in the first half of 2019, with services available in 38 percent of the cities in China.
iPhone-maker Foxconn Technology Group, Lenovo and Ant Financial all leverage Megvii’s biometric face-scanning systems. Its “personal IoT solutions” segment generated 22 percent of its revenue, while its logistics solutions represented 5 percent.
In 2018, Megvii reportedly lost 3.4 billion yuan (roughly $480 million) due to changes in value of preferred shares. At the end of June, it listed 1.4 billion yuan (roughly $198 million) in cash, equivalents and bank balances, mostly used for operations in the first six months. Its term deposits stood at 3.3 billion yuan (roughly $465 million) as of June.