Megvii, the China-based facial recognition technology developer backed by e-commerce group Alibaba, is looking to raise $500m in a funding round that will value it at $3.5bn, Reuters reported on Monday.
The state-owned Bank of China is set to lead the round with a $200m investment through private equity subsidiary Bank of China Group Investment, two people with knowledge of the matter told Reuters.
Alibaba could also take part, with the valuation potentially reaching $4bn, people familiar with the matter told Bloomberg, adding that the round is expected to close this month.
Also known as Face++, Megvii provides facial and body recognition technology that can be added to software to fulfil functions such as processing online video streams or unlocking mobile devices by utilising a user’s face as a security pass.
The technology is also being increasingly used for large-scale Chinese surveillance systems, with the city of Beijing set to construct a citywide, artificial intelligence-equipped CCTV system.
Bloomberg reported in July this year that Megvii was on the brink of closing a $600m funding round featuring Alibaba and investment firm Boyu Capital, though the company did not confirm that fundraising.
Megvii had completed a $460m round in December 2017 featuring manufacturing services provider Foxconn and Ant Financial, the financial services affiliate of e-commerce firm Alibaba, as well as diversified conglomerate SK Group and Russia-China Investment Fund, which led the round.
Foxconn had previously taken part in a $100m round for the company in December 2016 that included $20m from Foxconn and additional capital from CCB International Holdings, part of financial services firm China Construction Bank.
Conglomerate Legend Holdings provided an undisclosed amount of seed capital for Megvii in 2013 through its Legend Star unit, before the company added $47m from backers including Innovation Works and Qiming Venture Partners across rounds in 2014 and 2015.
