SenseTime Heads To IPO On The Hong Kong Stock Exchange
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Chinese artificial intelligence start-up SenseTime goes public in Hong Kong, even as its mainland counterparts withdraw their stock market listing plans in response to Beijing’s growing crackdown on the tech industry.
The company, whose backers include SoftBank, Alibaba, Tiger Global and Silver Lake, filed documents for an initial public offering on the Hong Kong Stock Exchange on Friday evening. SenseTime didn’t say how much money it intended to raise, but it is one of the most valuable AI start-ups in the world.
SenseTime last raised funds at a valuation of over $ 8 billion last year, two people familiar with the matter said, but its valuation is now closer to $ 12 billion, one said. people.
Despite being blacklisted by Donald Trump’s administration in 2019, SenseTime’s activity has grown considerably in recent years. It is one of the key companies in China’s booming AI industry, an essential facet of President Xi Jinping’s “Made in China 2025” plan.
In the filing, the company said its revenue for 2020 increased 14% to Rmb 3.4 billion ($ 525 million), while first-half 2021 revenue increased 92% from the previous year. same period last year to reach 1.6 billion Rmb. Operating losses increased 13% to Rmb 1.8 billion in 2020, and losses for the first six months of this year totaled Rmb 2.1 billion.
SenseTime’s move comes as Chinese regulators cracked down on the tech industry this year, an attack that has targeted consumer technologies including e-commerce, food delivery, loans, and gaming companies.
Cloud Village, China’s second-largest music streaming service, canceled a $ 1 billion Hong Kong IPO this month amid concerns over growing regulatory crackdown.
However, AI, along with the biotech and semiconductor industries, have received huge support from Beijing. The Chinese leader sees companies in this sector as crucial to reducing dependence on American technology and strengthening the country’s reputation as a full-fledged technology hub.
SenseTime is known for its computer vision technology, which enables machines to analyze visual data. Its facial recognition software is used in millions of smartphones around the world, and the pandemic has spurred demand for its products such as temperature sensors and the ability to identify people wearing masks.
A key product is SenseCore, a platform that helps businesses build AI models and algorithms for their low-cost needs, such as autonomous driving.
However, its filing revealed regulatory risks. SenseTime said it was subject to “complex and evolving” data protection laws, including a new draft regulation for cybersecurity reviews in China. “We cannot predict the impact of the draft measures, if any, at this point,” the company said.
The growth of the seven-year-old company has also put SenseTime on the radar of US regulators. In October 2019, the US Department of Commerce placed SenseTime and other top Chinese AI champions, including Megvii, iFlytek and Yitu, on its “entity list”, accusing them of aiding in the “crackdown. , mass arbitrary detention and high-tech surveillance “in the western region of China. from Xinjiang.
Companies on the list cannot purchase products from US companies.
“There can be no assurance that we will maintain our access to all of the items necessary for our business,” SenseTime said.
The company had previously sold its majority stake in a police surveillance company in Xinjiang following an international condemnation earlier in 2019. SenseTime has since developed a white paper “Code of Ethics for the Sustainable Development of AI” and works with the United Nations to improve ethics in AI.
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