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.

Christopher Udemans is a Shanghai-based technology reporter. He covers Chinese artificial intelligence, mobility, and cybersecurity. You can contact him at chrisudemans [at] technode [dot] com.