Report says Megvii mulls HK IPO

Business | 11 Jan 2019 4:14 pm

Megvii, the owner of facial recognition developer Face++, is considering an initial public offering in Hong Kong that could net as much as US$1 billion, Bloomberg reported.

Megvii is weighing an IPO to raise between US$500 million and US$1 billion with Hong Kong as a destination, people familiar with the matter said, requesting not to be named because the matter is private.

Deliberations are at an early stage and no final decision has been made as the details of the plans could still change, the people said, according to the report.

The Beijing-based firm, backed by Alibaba Group, joins rival artificial intelligence outfits raising funds to help fulfill the country’s ambition of leading the field by 2030. Megvii is competing with the world’s largest AI startup SenseTime Group -- also backed by Alibaba-- as the two provide facial recognition technology to financial, retail, mobile and government clients. SenseTime itself is said to be in discussions to raise about US$2 billion.

"We have no specific IPO plans,” Xie Yinan, a spokesman for Megvii, said in an emailed statement.

Megvii provides face-scanning systems to companies including Lenovo (0092). and Ant Financial, the payments company that underpins Alibaba’s e-commerce platforms. Beyond commerce, facial recognition technology has attracted interest from government authorities who want to be able to detect crimes and threats to social stability before they take place.

Megvii’s software uses facial scans held in a Ministry of Public Security database drawn from identification files on about 1.4 billion Chinese.

The startup’s investors include Boyu Capital, Ant Financial, SK Group, and the Russia-China Investment Fund, a venture backed by sovereign wealth funds of the two nations. Other backers include Foxconn Technology, CCB International, Qiming Venture Partners and Sinovation Ventures. It was said to be raising a US$500 million round in December at a valuation of up to US$4 billion, people familiar said at the time.

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