Megvii Inc, the artificial intelligence supplier in China, also recognized as Face++, is planning to raise $500 million in the latest funding round making the present worth of the company $3.5 billion, persons having knowledge about the situation claimed.
According to two people, private equity (PE) arm of the state bank, Bank of China Group Investment Ltd, wants to chair the fundraising with $200 million. The people further said that the conditions of the fundraising are not final yet.
Beijing-based Megvii refused to give any statement. PE arm of Bank of China did not reply to the appeal for giving a statement.
New fundraising plans of Megvii comes in the middle of Beijing’s wish to develop a universal closed-circuit television (CCTV) surveillance system and grow into an AI’s world-wide spearhead. AI is the technology that is gradually becoming important in different areas.
Because of Beijing’s emphasis on AI, some overseas investors and Chinese are investing money into small venture companies that have expertise in this technology. In this year, according to Refinitiv data, after 75 deals, the investments in this area rose to about $2 billion and this is four times more than the total investments that took place in the last two years.
Artificial intelligence has attracted commerce from medicine to financial services, who are finding ways to implement algorithms to examine huge amounts of data to identify patterns and solve problems. It is also planned to extend this to service robots and driverless cars in the coming years.
In May, SenseTime Group Ltd, the competitor of Megvii, raised $620 million at a valuation of more than $4.5 billion. This was after funding round of $600 million by Alibaba in April.
At the beginning of this year, Alibaba also put in $327 million in Megvii, the venture behind “scan your face to pay” function of Alipay, which is a huge online payment arm of e-commerce. Megvii and Alibaba refused to make a statement on this investment.
Last year, investors from Foxconn Technology, China State-Owned Capital Venture Investment Fund, Ant Financial, and others invested $460 million in Megvii. Megvii was discovered in 2011 by Yin Qi and his two friends from the computer science department of Tsinghua University. It supplies facial recognition and more AI tech to commerce and governments.
According to Megvii’s website, it considers Ant Financial, Alibaba, Huawei Technologies [HWT.UL], and Lenovo Group as important clients and helps state-owned companies and government bodies.