The round brings Megvii’s valuation to more than $4 billion ahead of a planned initial public offering (IPO) in Hong Kong

Reports confirms that Megvii Technology, a Chinese artificial intelligence provider also known as Face++, has recently secured $750 million in a new round of funding.

Sources familiar with the matter suggested that the latest funding round brings Megvii’s valuation to more than $4 billion, ahead of a planned initial public offering (IPO) in Hong Kong later this year. Bank of China Group Investment, a private equity unit of the state bank has led the fundraising with $200 million investment.

Apparently, ICBC Asset Management Co, Macquarie Group, and a solely owned subsidiary of the Abu Dhabi Investment Authority, one of the largest sovereign wealth funds in the world, also joined the new round of funding. Along with this, the existing investor Alibaba Group had also participated in this round.

Sources further added that Megvii Technology is also supported by Foxconn Technology and has employed JPMorgan, Goldman Sachs, and Citigroup to work on its Hong Kong IPO. In December, it was informed that Megvii was aiming to secure $500 million in a new round of funding.

According to the sources, these proceeds will primarily be used to boost technology capabilities of Megvii in deep learning, to finance its global expansion and speed up the commercialization of its AI-enabled solutions, along with recruiting talent.

Seemingly, the fundraising comes at a time when Beijing plans to create a global closed-circuit television surveillance network (CCTV) and become a global leader in AI technology, a technology that is gradually becoming key to several sectors. Megvii provides facial recognition solution for the online payment unit of Alibaba, sources added.

A competitor of Megvii, SenseTime Group Ltd has secured over $600 million from SoftBank and its Vision Fund, raising its value to about $7.6 billion.

Reportedly in 2018, investments in the AI sector had increased to $2.1 billion through total 88 deals, which is more than four times the total value in the past two years.

Source Credit: https://www.reuters.com/article/us-megvii-fundraising/chinese-ai-start-up-megvii-raises-750-million-ahead-of-planned-hk-ipo-idUSKCN1SE138