Megvii Face++, the Chinese facial recognition startup, has raised $460 million in venture capital funding, led by the Chinese government.
According to news from The Financial Times, the move on the part of the Chinese government to invest in the facial recognition startup comes as China is investing tons of money in artificial intelligence (AI) research and technology in an effort to counter the U.S.’ current lead.
Megvii Face ++ told the Financial Times that it raised the funding through a Chinese state-owned venture capital fund and the Russia-China Investment Fund. The latter is backed by the sovereign wealth funds of China and Russia. Ant Financial, the financial arm of Alibaba, also invested in the company. The biometrics startup had a valuation of $1.5 billion prior to the recent influx of cash. Megvii Face ++ declined to reveal what its new valuation is.
Earlier this year, the State Council in China revealed its ambition to become the leader in AI research by 2030. Government-run venture capital funds are supporting this goal by investing in Chinese AI technology companies.
“Investment from the ‘national team’ [state-owned funds] means Face++ will receive much more policy support from the government, which will greatly benefit their development,” said Leng Biao, professor of body recognition at Beijing University of Aeronautics and Astronautics in an interview with the Financial Times. “But there are risks too, because national team funding comes with restrictions on who can invest in them in [the] future.”
Megvii Face++ technology is being used by Ant Financial for mobile payments via biometrics. Ant is currently trialing software that lets consumers pay by scanning their face and is in talks with local banks to convince them to use the software at branches. The startup is also working with Chinese police to automatically track the more than 1 billion citizens in the country to identify them in surveillance footage, noted the report.