SenseTime planning year’s biggest biometrics IPO after all, seeking $8.5B valuation

Aug 17, 2020 | Chris Burt

SenseTime develops biometric identification system

The blockbuster biometrics IPO once planned by SenseTime may come off in Hong Kong this year after all, Bloomberg reports, perhaps as a dual listing on mainland China. The facial recognition unicorn is rumored to be seeking an $8.5 billion pre-funding valuation.

The plans, even if true, are preliminary, and speculation about a SenseTime IPO has welled up before, with the company reported just weeks ago to be considering a listing on Shanghai’s STAR tech market that could value it at $10 billion.

The company was added to the U.S. Entity List for alleged involvement in oppression in Xinjiang, Hong Kong was wracked with protests over political changes that have further inflamed tensions with the West, and then the COVID-19 pandemic struck, leading to a 93 percent drop in IPO share sales, and the postponement of a listing in Hong Kong. A plan to build a European headquarters in the UK has also been set aside, according to recent reports.

What affect any or all of these factors will have is difficult to say. Some investors will shy away, but even the World Bank is alleged to have supported China’s repressive biometric surveillance operations in Xinjiang, showing how intertwined the international financial system is.

A bi-partisan request for answers about how that happened was recently sent to the World Bank Group by Congressional-Executive Commission on China Co-chairs Rep. Jim McGovern (D-Mass.) and Sen. Marco Rubio (R-Fla.), Axios reports. The bank denied a request to provide equipment for facial recognition systems accessible to local public security bureaus, but was found to have continued its loan program in the region.

The CEO of SenseTime claimed prior to the postponed Hong Kong IPO it was valued at $7.5 billion, and the company says its revenue reached 5 billion yuan (US$720 million) last year, a 147 percent increase from 2018.

The company’s biometric facial recognition and computer vision technologies are used in 127 cities across China, as well as by smartphone manufacturers and Honda.

Major investors in SenseTime include Chinese entities like SoftBank, but also Singapore’s Temasek Holdings Pte. and Qualcomm Ventures. There would certainly be significant interest among many investors in any SenseTime IPO, but whether there is enough to satisfy the company’s ambitions, given rumors of funding challenges a few months ago, remains to be seen.