Alibaba-backed AI startup Megvii raises US$750 million

May 09, 2019 14:26
Megvii has developed the City Brain technology, which connects standardized hardware such as sensors, robots and personal devices around the city. Photo: Megvii

Chinese artificial intelligence (AI) provider Megvii, known for its facial recognition brand Face++, has raised US$750 million in a Series E funding round, taking its valuation to slightly over US$4 billion.

The ambitious startup is preparing for an initial public offering in Hong Kong later this year, Reuters reports, citing two people with knowledge of the matter.

Bank of China Group Investment (BOCGI) Ltd., the state bank’s private equity arm, led the fundraising with US$200 million. Australian investment bank Macquarie Group, ICBC Asset Management (Global), and a wholly-owned subsidiary of the Abu Dhabi Investment Authority, one of the world’s biggest sovereign wealth funds, also joined the funding round.

Alibaba Group also participated in this round, after investing in Megvii for the first time last year. Alibaba is using its facial recognition technology to verify transactions for its online and mobile payment business Alipay.

Megvii said it will use the fresh capital to strengthen its technology capabilities in deep learning, accelerate the commercialization of its AI-enabled solutions, and recruit talent and finance global expansion.

Founded in 2011 by chief executive Yin Qi and two friends from China’s Tsinghua University, Tang Wenbin and Yang Mu, Megvii provides facial recognition and other AI-powered technology solutions to enterprises such as Alibaba, Ant Financial and Huawei Technologies.

It also provides services to government entities and state-owned firms, and help the Chinese government in its plans to build a ubiquitous closed-circuit television surveillance network and become an international AI leader.

Since its establishment, Megvii has raised US$1.4 billion in seven funding rounds, according to Crunchbase.

Previous backers include Foxconn Technology, Boyu Capital, SK Group, China State-Owned Assets Venture Investment Fund, and Russia-China Investment Fund, a private equity fund established by the Russian Direct Investment Fund and China Investment Corporation.

It has enlisted Citigroup, Goldman Sachs and JPMorgan to work on its Hong Kong IPO, according to Reuters. Megvii is said to be aiming to raise up to US$1 billion in the share offering.

Megvii rival SenseTime, one of the world’s most valuable AI startups, has so far raised US$2.6 billion, valuing it at US$7.6 billion in the most recent round. Its Series D funding round last September brought in US$1 billion Series D. Alibaba is also a major backer of SenseTime.

Since last year, another major AI unicorn in China, Sequoia-backed Yitu, has been working on deploying its intelligence solutions to partners in Southeast Asia.

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