Chinese artificial intelligence (AI) firm Megvii, the firm behind well-known computer vision tech company Face++, has filed for a public listing in Hong Kong on Aug. 26 with Goldman Sachs, J.P. Morgan and Citibank serving as the underwriters.
The listing will allow Megvii to secure more funds to undergo more rigorous and expansive research and development in the fields of AI and facial recognition, a key part of China’s drive to become a world leader in AI technology by 2030. Both Megvii and Alibaba
Backed by e-commerce giant Alibaba
According to the prospectus, the company posted a 1.429 billion yuan ($200 million) revenue in 2018, a massive 358.8% compound growth compared to its 2016 revenue, a meager 67 million yuan ($9.4 million). Revenue numbers dipped a little during the first half of 2019 to 949 million yuan ($132.8 million).
Megvii has not released the pricing of its shares or the timeline of its initial public offering (IPO). But the firm has signaled confidence in the Hong Kong market despite the ongoing protests and recent reports of Alibaba
Earlier this year, Megvii completed a $750 million funding round, reportedly putting its valuation north of $4 billion. Its closest rival, Sensetime, has a valuation at over $4.5 billion. This cash injection has helped spur Megvii’s recent revenue growth.
The Chinese company has also incurred widening losses of 3.35 billion yuan ($470 million) in 2018, compared to 758.8 million($106.2 million) in 2017. In the first six months of this year alone, the company lost 5.2 billion yuan ($730 million) — more than the amount it lost throughout 2018. Megvii attributed this to continued investment in its R&D department.