Alibaba-Backed AI Startup Megvii Receives Go-Ahead for 6 Billion Yuan Shanghai IPO

megvii
(Source: Pandaily)

On September 9, an official announcement issued by the Shanghai Stock Exchange showed that the initial listing of AI firm Megvii Technology on the Science and Technology Innovation Board has been approved.

Megvii proposed to raise 6.018 billion yuan ($934.6 million) in the transaction. According to its updated prospectus on September 2, after deducting issuance expenses, all the funds to be raised are planned to be used for projects related to the company’s main business and the working capital required for its development.

Among the funds to be raised, Megvii plans to invest 2.2 billion yuan in a basic R&D center construction project, 1.1 billion yuan for an AI vision Internet of Things solution and a product development and upgrading project. The firm also plans to invest 580 million yuan for an intelligent robot research and upgrading construction project, 856 million yuan for a sensor research and design project, and 1.3 billion yuan for supplementing working capital.

According to the prospectus, from January to June of 2021, the operating income of Megvii was 669 million yuan.

From 2018 to the first half of 2021, Megvii’s net losses were 2.80 billion yuan, 6.643 billion yuan, 3.326 billion yuan and 1.858 billion yuan, respectively. The net losses after non-recurring gains and losses were 565 million yuan, 1.249 billion yuan, 1.547 billion yuan and 929 million yuan, respectively.

As for the reasons behind the losses, Megvii Technology explained that, on the one hand, it was mainly caused by the change in the fair value of preferred shares, which affected the net profit by 925 million yuan.

Another reason is that the company, as an innovation-driven enterprise in the field of AI, is still in its start-up period. During the reporting period, it invested a lot of resources in the research of systems, algorithms, operating systems and AI redefinition hardware, and also increased investment in business development.

SEE ALSO: Megvii Clarifies Listing Rumor: Haven’t Ruled Out Hong Kong IPO, Considering Star Market

It is reported that the top four computer vision companies in China are SenseTime, Megvii, CloudWalk and Yitu Technology.

Previously, SenseTime submitted a listing application to the Hong Kong Stock Exchange at the end of August. On July 20, CloudWalk received approval from the Science and Technology Innovation Board. At the beginning of July, Yitu Technology terminated its IPO.