Sensetime, one of China’s highest-profile artificial intelligence startups, is looking to raise $1 billion after seeing wider adoption of the company’s technology during the coronavirus pandemic.

Why it matters: Fresh funding for Sensetime could signal that investors are regaining confidence after the Covid-19 outbreak in China. Money has been scarce for China’s tech startups in the wake of the epidemic.

  • Venture capital investments in China dropped by a third during the first quarter compared with the same period a year ago, according to data from business information provider Itjuzi.
  • Total investment fell to RMB 119.1 billion ($16.7 billion) in Q1 from RMB 173.6 billion during the first three months of last year.

Details: The $1 billion investment could give Sensetime a valuation of at least $9.5 billion, up from $7.7 billion at the end of 2018, the Wall Street Journal reported, citing people familiar with the matter.

  • The round of funding would be the last before an initial public offering (IPO), the people said.
  • Earlier this year, Sensetime reportedly delayed its plans to go public, looking instead for up to $1 billion in private funding. The company believed it would see more success in its IPO if it waited, sources said at the time.
  • Since the start of the Covid-19 outbreak in China, Sensetime has seen widespread use of its contactless temperature-monitoring technology, which has been deployed in metro stations, office buildings, and factories around China.
  • The company declined to comment when reached by TechNode on Monday.

Context: Nevertheless, China’s biggest AI companies have faced increased pressure since several firms were placed on the US Entity list in October.

  • US authorities placed Sensetime, face recognition giant Megvii, speech recognition firm iFlytek, and surveillance camera maker Hikvision on the list, effectively barring them from doing business with American companies without permission.
  • Sensetime has been moving to make its business more globalized, opening offices or research centers in Japan, Singapore, and the United Arab Emirates.

Chris Udemans

Christopher Udemans is TechNode's former Shanghai-based data and graphics reporter. He covered Chinese artificial intelligence, mobility, cleantech, and cybersecurity.