Chinese AI firm eyes IPO in HK despite protests

HONG KONG • Chinese artificial intelligence (AI) start-up Megvii is filing documents soon for a Hong Kong initial public offering (IPO) that could raise as much as US$1 billion (S$1.4 billion), people familiar with the matter said, brushing aside a market downturn spurred by pro-democracy protests across the financial hub.

The owner of facial-recognition platform Face++ was planning to submit an IPO filing to the Hong Kong stock exchange as soon as yesterday, one of those people said, asking not to be named because the matter is private. Megvii declined to comment.

Megvii is moving forward even as other companies pump the brakes on their Hong Kong IPO ambitions, wary of months of protests that have gripped the city and rocked its stock market.

Alibaba Group Holding, a backer of Megvii, is among those that are gunning for a Hong Kong listing but have held back to gauge investors' reception.

Megvii's filing will kick off the formal process for an IPO, though it could be months before its actual debut. The Beijing-based company is part of a coterie of AI outfits underpinning China's ambition of leading the field by 2030.

The seven-year-old outfit now provides face-scanning systems to companies such as iPhone-maker Foxconn Technology Group, Lenovo Group and Ant Financial, the payments giant that supports Alibaba's e-commerce business. Its facial recognition technology has provided verification services to more than 400 million people, Megvii said in January.

Beyond commerce, the company is also building software for sensors and robots. And the Chinese government is a client: Megvii's AI technology has been used by the authorities in more than 260 cities and helped police in arresting over 10,000 people.

Megvii is moving forward even as other companies pump the brakes on their Hong Kong IPO ambitions, wary of months of protests that have gripped the city and rocked its stock market. Alibaba Group Holding, a backer of Megvii, is among those that are gunning for a Hong Kong listing but have held back to gauge investors' reception.

The company last raised US$750 million in a Series D financing round in May, with the investors including China Group Investment, ICBC Asset Management (Global), Macquarie Group and a unit of the Abu Dhabi Investment Authority. Its other backers include Boyu Capital, Ant, SK Group, Foxconn, Qiming Venture Partners and Sinovation Ventures.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on August 24, 2019, with the headline 'Chinese AI firm eyes IPO in HK despite protests'. Print Edition | Subscribe