According to sources familiar with the story, Megvii Inc., a Chinese AI provider that is well-known as Face+ +, is aiming to raise $500 million in a recent financing exercise that pegs the company’s current valuation at $3.5 billion.
Two of the sources told Reuters that the Bank of China Group Investment Ltd, the bank’s private equity arm, is set to lead the fundraising round with a staggering $200 million.
The sources declined to be mentioned since the information is still confidential and the fundraising terms are yet to be finalized.
Both Beijing-based Megvii and the Bank of China’s private equity arm failed to comment.
The latest fundraising exercise by Megvii comes at a time when Beijing is planning to not only create a ubiquitous CTTV surveillance network but also become a global artificial intelligence (AI) leader.
According to Refinitiv data, Chinese investors and some other foreign ones are currently investing in startup companies, particularly those that specialize in artificial intelligence (AI).
Investments in the artificial intelligence space increased to almost $2 billion in 2018 thanks to 75 deals, over four times the entire value in the past two years.
Artificial intelligence has captured the attention of enterprises across various industries such as financial services and healthcare, especially when it comes to sifting through massive piles of data in a bid to identify patterns and solve issues.
The technology is also expected to penetrate other areas such as service robots and driverless cars in the future.
In May, Megvii ’s top rival, SenseTime Group Ltd, fundraised $620 million at a total valuation of more than $4.5 billion, after completing a $600 million funding round back in April that was led by Alibaba.
According to details from a financing document reviewed by Reuters, Alibaba invested about $327 million in Chinese AI startup Megvii earlier in 2018.
Megvii is known for being the startup behind Alibaba’s online payment arm’s “scan your face to pay” capability.
Both Megvii and Alibaba declined to comment on the investment.
Back in 2017, Megvii fundraised $460 million from various investors including Foxconn Technology, Ant Financial, and China State-owned Capital Venture Investment Fund.
Megvii was established in 2011 by Yin Qi and two of his friends from a pilot computer science program of Tsinghua University.
Megvii offers facial recognition and other artificial intelligence technologies to both governments and businesses.
According to its website, Megvii considers the likes of Huawei Technologies, Lenovo Group, Ant Financial, and Alibaba as its top customers and serves both state-owned firms and government entities.