INSUBCONTINENT EXCLUSIVE:
Megvii Technology, the Beijing-based artificial intelligence startup known in particular for its facial recognition brand Face++, has filed
for a public listing on the Hong Kong stock exchange.Its prospectus did not disclose share pricing or when the IPO will take place, but
Reuters reports that the company plans to raise between $500 million and $1 billion and list in the fourth quarter of this year
Its last funding round was a Series D of $750 million announced in May that reportedly brought its valuation to more than $4 billion.Founded
comes against the backdrop of an economic recession and political unrest, including pro-democracy demonstrations, factors that have
contributed to a slump in the value of the benchmark Hang Seng index
Last month, Alibaba reportedly decided to postpone its Hong Kong listing until the political and economic environment becomes more
fair value of its preferred shares and investment in research and development
Its revenue grew from 67.8 million RMB in 2016 to 1.42 billion RMB in 2018, representing a compound annual growth rate of about 359%
In the first six months of 2019, it made 948.9 million RMB
Between 2016 and 2018, however, its losses increased from 342.8 million RMB to 3.35 billion RMB, and in the first half of this year, Megvii
has already lost 5.2 billion RMB.Investment risks listed by Megvii include high R-D costs, the United States -China trade war and negative
publicity over facial recognition technology
Earlier this year, Human Rights Watch published a report that linked Face++ to a mobile app used by Chinese police and officials for mass
regulations in China and other jurisdictions, bias applications or mass surveillance, that could affect user perception, public opinions and
to the United States as part of the ongoing trade war
It also cited reports that Megvii is among the Chinese tech companies the United States government may add to trade blacklists
