Megvii, the Chinese artificial intelligence (AI) company that goes by the name Face++, announced on Wednesday (May 8) that it has raised $750 million in funding.
According to a report in Reuters, Megvii now has a valuation of a little more than $4 billion. Citing two sources with knowledge of the matter, the Chinese AI company is gearing up to launch an initial public offering (IPO) in Hong Kong later this year. Megvii has reportedly tapped Citigroup, Goldman Sachs and JPMorgan to handle the IPO. Earlier in the year, reports pegged the IPO at $1 billion.
Megvii offers face-scanning systems to companies like Ant Financial and Lenovo Group Ltd. In order to provide this technology, the firm uses facial scans held in a Ministry of Public Security database taken from legal identification files on about 1.3 billion people in China.
The round of fundraising was led by Bank of China Group Investment (BOCGI), the state bank’s private equity unit. BOCGI invested $200 million in the fundraising round, noted the report. Other participants included Macquarie Group, ICBC Asset Management and a wholly owned unit of Abu Dhabi Investment Authority. Alibaba, an existing investor in Megvii, also took part.
Back in December, a report by Reuters said Megvii was aiming to raise $500 million in a new fundraising round. The company plans to use the proceeds from the capital raise to enhance its technology in deep learning and to accelerate commercialization of its AI services. Proceeds will also be used to bring on more talent and to expand around the world. Reuters noted that AI has been a hot sector for investors in Chinese companies. In 2018, AI investments hit $2.1 billion, with 88 deals funded – four times the total value of deals for the past two years.