China-based facial recognition software provider Megvii has received $750m in series E funding from investors including e-commerce group Alibaba at a valuation of more than $4bn, Reuters reported yesterday.
The round was led by a $200m investment from Bank of China Group Investment, the private equity arm of state-owned financial services firm Bank of China, according to two people with knowledge of the matter.
Investment banking firm Macquarie Group, sovereign wealth fund Abu Dhabi Investment Authority and ICBC Asset Management, a division of financial services firm Industrial and Commercial Bank of China, filled out the investors.
Megvii provides a software platform known as Face++ which uses artificial intelligence technology to identify faces, people and objects.
The technology is used in consumer devices and retail, but is increasingly facing scrutiny due to the role of biometric systems in mass surveillance, particularly with regard to China’s Muslim Uighur population.
The company intends to channel the series E proceeds into improving its deep learning and AI technology, hiring more staff and growing its business internationally. It has hired Citigroup, Goldman Sachs and JP Morgan to underwrite an initial public offering that could potentially raise $800m, according to Reuters.
Megvii reportedly raised $600m from investors including Alibaba and private equity firm Boyu Capital in July 2018. It completed a $460m round led by Russia-China Investment Fund in late 2017 that also featured contract manufacturer Foxconn, diversified conglomerate SK and Ant Financial, the financial services affiliate of Alibaba.
Foxconn had invested $20m in the company as part of a $100m series C round in 2016 that included China Construction Bank subsidiary CCB International Holdings. It followed $25m in series B funding from Innovation Works and Qiming Venture Partners the year before.
Legend Star, a corporate venturing vehicle for conglomerate Legend Holdings, supplied seed capital for Megvii that preceded a similarly undisclosed amount of series A funding from Sinovation Ventures in 2013.
