Artificial intelligence company Sensetime has delayed its plan to go public in Hong Kong, and is instead seeking up to $1 billion in private funding.
Why it matters: Sensetime has faced numerous hurdles since late last year as it laid plans for its initial public offering (IPO). In October, the US blacklisted the company along with several other Chinese AI firms, effectively blocking it from doing business with American companies.
- The Covid-19 outbreak, which was first reported in the central Chinese city of Wuhan and has now infected more than 200,000 people worldwide, has weakened investor sentiment, causing a massive drop in the number of companies listing in Hong Kong.
Details: Sensetime is looking to raise between $500 million and $1 billion in private funding from new and existing investors or pre-IPO fundraising, the Nikkei Asian Review reported, citing people familiar with the matter.
- The company was working on its listing with investment bank China International Capital Corp. last year but put its plans on hold following the US blacklisting.
- While rival AI firm Megvii previously filed to go public in Hong Kong, Sensetime believes it could see more success in its IPO if it waits, Nikkei sources said.
- “We do not have any new financial plans or information to share at this stage,” a Sensetime spokesperson said in a statement to TechNode on Thursday.
- The company expected its 2019 revenue to increase by 200% to $750 million, Reuters reported in December.
- Sensetime’s valuation reached $7.5 billion in 2019, CEO Xu Li said last year. The company was valued at $4.5 billion in 2018 following its $600 million Series C.
Context: Sensetime was one of eight Chinese companies blacklisted by the US in October over alleged complicity in Beijing’s human rights violations in China. Megvii, surveillance camera maker Hikvision, and speech recognition firm iFlytek were also included in the export ban.