Artificial intelligence firm Megvii’s application to list on the Hong Kong stock exchange has lapsed six months after the company filed its paperwork for a listing on the city’s bourse.
Why it matters: The Alibaba-backed startup has faced several hurdles as the company attempts to go public. Megvii was blacklisted in the US along with several of its Chinese counterparts, effectively banning it from doing business with American companies without permission.
- Megvii initially filed its application for its initial public offering (IPO) during the second half of 2019 but reportedly decided to push back its listing to this year following additional scrutiny from the Hong Kong board.
- Megvii has also seen delays as a result of the China-US trade war and protests that broke out in Hong Kong last year.
- The novel coronavirus has added additional complications to the company’s plans, as many Chinese businesses came to a standstill in the weeks following the Lunar New Year holiday.
Details: Megvii’s IPO status was listed as “lapsed” on the Hong Kong stock exchange’s website on Tuesday. IPO applications are required to be finalized within six months of their submission date.
- The company plans to refile for a listing in Hong Kong as soon as it has updated its financial data from 2019, two sources close to the matter told Reuters.
- Megvii was not immediately available for comment when contacted by TechNode on Tuesday morning.
- According to Hong Kong rules, companies can renew lapsed applications within three months of expiration.
- Megvii had not disclosed how much it seeks to raise in documents submitted to the Hong Kong stock exchange, but estimates range from $500 million to $1 billion, according to people cited by Bloomberg and Reuters.
- The company in May raised $750 million in a funding round led by Bank of China’s equity arm. The investment valued Megvii at more than $4 billion.
Context: Megvii is one of several companies spearheading China’s AI boom. Others include Sensetime, Yitu, and Cloudwalk, though none have yet gone public.
- Megvii could become the first to tap the capital markets and act as a litmus test for other companies in the same industry to follow.