Biometrics unicorns Megvii and SenseTime’s revenues reportedly bounced back from Entity List impact

Jul 29, 2020 | Chris Burt

Biometrics unicorns Megvii and SenseTime’s revenues reportedly bounced back from Entity List impact

Top Chinese biometrics unicorns Megvii and SenseTime are not experiencing prolonged difficulty raising funds or winning foreign contracts despite the blocks put in place by their inclusion on the U.S. Entity List , according to The Financial Times.

Megvii and SenseTime were put on the list late last year for alleged involvement in human rights violations in the Xinjiang Uighur Autonomous Region (XUAR).

According to the report, sources say Megvii is in talks to raise funds, and is having internal discussions about whether it needs to raise capital before or after a potential IPO next year. The company delayed an IPO in Hong Kong earlier this year, shortly before it reported its earnings had been flattened by the U.S. restrictions.

SenseTime raised $1 billion in capital earlier this year from private investors, FT reports, even as it postponed its own IPO. Sources said the IPO is not expected soon. The company completed a deal for cloud AI services with a Thai property developer earlier this year, and has made the shortlist for a major expressway monitoring contract in Japan. Talks have also been held with a Singapore casino to roll out its technology to identify cheaters.

A source told FT that Megvii’s revenue has returned to the level it was at before the Entity List inclusion, and the company’s temperature measurement systems have been deployed in Japan and the Middle East this year. The company is now expected to attempt a listing on the Shanghai Stars exchange in 2021.

iFlyTek says its revenue had been negatively affected by around $12.7 million from its placement on the list, but net profit in 2019 increased by 51 percent to Rm819 million (US$117 million).

Despite the assertions about Megvii and iFlyTek’s revenues in the article, it was Megvii’s growth, not existing business, where the impact of the Entity List placement was seen in April, and the latter’s 2019 business would not likely have been significantly affected by something that happened in October of that year.