Alibaba-Backed Chinese AI Startup Megvii Sets For Shanghai IPO: Bloomberg

Author: Anusuya Lahiri | March 12, 2021 01:01pm

Alibaba Group Holding Ltd (NYSE: BABA)-backed Megvii Technology Ltd is set to become the first major Chinese artificial intelligence (AI) start-up to go public after filing for a Chinese Depositary Receipt (CDR) offering on the Shanghai’s Star board on Friday, Bloomberg reports.

The start-up plans to issue up to 253 million Class B shares to raise at least $925 million (6 billion yuan) after fees, which would be utilized to fund R&D in robotics, visual IoT, and infuse capital. CITIC Securities Co Ltd (OTC: CIIHF) (OTC: CIIHY) is the listing sponsor.
Megvii specialized in facial recognition. China’s security fixation led to a major boost to the eight-year-old firm by triggering a nationwide video surveillance boom.
The company recorded a loss of $160 million (1.03 billion yuan), excluding one-time items, in the first nine months of 2020.
The company’s application for a Hong Kong listing about two years ago failed after being blacklisted by the Trump administration over alleged involvement in human rights violations against Muslim minorities in China.
Megvii joined the likes of Lenovo Group Ltd (OTC: LNVGF) (OTC: LNVGY), capitalizing on the CDR program kicked off by Beijing three years back to attract capable start-ups and big names.
Price action: BABA stock was down 3.84% at $231.55 on the last check Friday.