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Megvii still wants IPO; execs filing $840M offering

Megvii still wants IPO; execs filing $840M offering
 

Having unsuccessfully tried twice before to float an IPO, Chinese AI and biometrics firm Megvii is preparing its third try, according to China state media.

The facial-recognition algorithm developer, which is majority owned by a pair of firms owned by Alibaba, reportedly has rebooted its IPO registration, for a second time in the Shanghai Stock Exchange.

According to the statement published in state-owned Yicai Global, Megvii‘s leadership and financial backers want to raise at least 6 billion yuan, or US$840 million. The proceeds would fund basic and sensor R&D and products including Internet of Things goods and robots.

Megvii first registered in Hong Kong in 2019 before abandoning the effort after the United States placed it on a sanctions list. It’s still on that list.

Executives moved the IPO registration to Shanghai shortly afterward, but ended that campaign, too.

In December 2021, Washington named the company one of eight Chinese firms that had collaborated with the nation’s autocratic government to repress Uyghurs, a persecuted religious and political minority in the country.

Being on the list meant that no “U.S. persons” could buy or sell certain of Megvii’s publicly traded securities. That apparently was deemed as cordoning too much market capital for the Chinese government, and the IPO was abandoned.

Megvii remains among the leaders in biometric accuracy, according to world’s leading benchmark of facial recognition algorithms, produced by the U.S.’ NIST.

Among Megvii’s largest investors are Alibaba’s Ant Group and Taobao China, with about 30 percent of shares. The founders of Megvii, Yin Qi, Tang Wenbin and Yang Mu, own about 70 percent, but, according to the statement, they are the “de facto controllers.”

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