Chinese Artificial Intelligence Start-Up Megvii Filing for $ 1 Billion IPO
Investors and Leaders are undeterred by the political turbulence in Hong Kong.
Megvii Technology will list its initial public offering on the Hong Kong Stock Exchange.
The China-based artificial intelligence start-up, which was recently valued at about $ 4 billion in its latest funding round in May, appears to be confident that the supercharged political environment in Hong Kong and jittery global markets will not affect its capital float.
The Alibaba group is a significant holder in Megvii.
Megvii raised $ 750 million in the May funding round. Alibaba owns a 14% stake in the company, while Ant Financial holds 15% through a subsidiary. Ant Financial, the highest valued tech company in the world, is an affiliate of the Alibaba group. Other investors in the funding round included Bank of China Group Investment and Australia’s Macquarie group.
Ironically, Alibaba last week decided to put off an up to $ 15 billion listing in Hong Kong, playing safe because of the political unrest.
Artificial intelligence milestone
If the IPO proves successful, Megvii would be the first Chinese artificial intelligence start-up to list on the Hong Kong exchange. Megvii’s claim to fame is Face+++, its facial recognition software. The company is also the biggest provider of third-party authentication software globally.
The company was founded in 2011 by CEO Yin Qi and two friends from Tsinghua University. The Chinese government is pushing for China to become a global leader in artificial intelligence.
According to estimates, Megvii could raise a minimum of $ 500 million in the IPO, and as much as $ 1 billion if all goes well. It will use the funds for research and development, marketing and worldwide expansion, including “strategic investment opportunities.”
Finally, prospective IPO investors may like to consider risks from the Hong Kong protests. These risks also include the impact on Hong Kong economy, the ongoing US-China trade war, and swirling rumors earlier this year that the US could ban the company for its role in a Chinese mass surveillance system used by police to monitor citizens.
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