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Face biometrics giant Megvii approved for $925M IPO on Shanghai Star exchange

Yitu suspends process
Face biometrics giant Megvii approved for $925M IPO on Shanghai Star exchange

Megvii is the latest biometrics unicorn from China to move towards an IPO, with the Shanghai Stock Exchange accepting the facial recognition developers’ application for a 6 billion yuan roughly (roughly US$925 million) public stock offering, BNN Bloomberg and other outlets report.

The company plans to issue just over 253.4 million Class B shares on Shanghai’s Star exchange, according to a Google translation of a Reuters article. The Chinese Depository Receipts registered are expected to represent at least 10 percent of the company’s total share capital. The prospective offering carries an over-allotment option, capped at 15 percent of the total shares in the IPO.

Megvii plans to use the proceeds for working capital and research and development activities into robots and computer vision capabilities like face biometrics for IoT devices.

Stops and starts by face biometrics unicorns

SenseTime and Yitu have previously filed paperwork to list on the Star exchange, but China Money Network reports that Yitu’s review has now suspended by the Shanghai Stock Exchange for three months at the request of the company and its issuer and sponsor, Guotai Junan Securities.

Yitu may not have abandoned the process, as it can apply for the review to be resumed in the future. The request for the suspension cites the amount of time needed to implement the rules and verifications required.

Megvii’s market is somewhat restricted by inclusion on the U.S. Entity List, but the company said in its prospectus that the measures would not materially affect its business. The company allowed it attempt to list on Hong Kong’s stock market to lapse last year, and filed its application to the Shanghai market for what could be the biggest biometrics IPO in years in January.

BNN Bloomberg notes the company reported losses of 1.03 billion yuan ($160 million) in the first nine months of 2020.

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