Artificial intelligence (AI) firm Megvii plans to seek approval for its Hong Kong listing on Thursday, aiming to raise at least $500 million, Reuters reported citing people familiar with the matter.
Why it matters: In October, the US government added Megvii to the so-called “Entity List” for alleged complicity in Beijing’s human rights abuses in China. The move effectively blocks the company from sourcing American-made components for its products.
- Megvii has denied the allegation and said its inclusion on the list comes as a result of a “misunderstanding.”
- The company’s initial public offering (IPO) has been delayed as a result of the US-China trade war and blacklisting.
Details: Megvii was previously seeking a fourth-quarter listing of up to $1 billion, according to Reuters.
- The company has yet to decide whether to carry out a roadshow once the application is approved, the people said.
- Goldman Sachs said after Megvii’s blacklisting that it was re-evaluating its involvement in the IPO given “recent developments.”
- The company filed for a Hong Kong IPO in August but gave no indication of how much it was seeking to raise.
Context: Megvii is one of a handful of startups that is spearheading China’s AI boom, including Sensetime, Yitu, and Cloudwalk, though none have yet gone public.
- These companies have benefited from broad government goals to build China into an AI front-runner by 2030.
- The company earns nearly three quarters of its sales from AI services for government agencies and the healthcare industry, among others.
- In May, Megvii raised $750 million in a round led by Bank of China’s equity arm, valuing the company at more than $4 billion.