Megvii Makes No Comments on IPO News Instead of Denial
COVID-19 and China
Stock price trending line. Photo by M. B. M. on Unsplash

Source from HKEJ (Hong Kong Economic Journal) on March 18th, 2019, Megvii (旷视科技, previously Face++) intended to launch its IPO (initial public offering) on the  Hong Kong Exchange and raise approximately HKD 7.8 billion (USD 993.6 million). When asked about their IPO plan, Megvii denied giving comments.

Megvii is a technology company with strengths in CV (computer vision). They are famous for their face recognition technology. In HKEJ’s news, someone familiar with the matter implied that Megvii would apply for IPO at the end of April or the beginning of May this year and consider using classified shares structure, a common share structure for technology companies on the stock exchange markets.

After receiving series D funding of USD 600 million in July 2018, Megvii was valued at USD 3 billion, according to itjuzi’s data. In January 2019, it was rumored that Morgan Stanley and Goldman Sachs would help Megvii to be listed on the U.S stock market. Megvii denied at once.

In less than three months, the IPO news was released once again. However, but Megvii neither clarified or refuted the news. The rumored IPO amount of USD 993.6 million is only 33.12% of the old valuation of UDS 3 billion given in 2018. Despite Megvii’s development, its current valuation is not disclosed but should be higher than USD 3 billion.

Currently, China has four CV unicorns: SenseTime (商汤科技), CloudWalk (云从科技), Megvii, and Yitu (依图科技) valued at USD 6 billion, USD 3.5 billion, USD 3 billion, and USD 2.4 billion respectively from their latest financing series. All these CV unicorns have solid technology in face recognition, but varies regarding its application. EqualOcean has introduced SenseTime and also released an interview video about its CEO, XU Li (徐立). SenseTime’s CV strengths is in security systems. On the other hand, Megvii has expanded its CV technology to security and others from its original line.

Megvii was formerly named Face++, and its facial recognition technology is widely installed by China’s smartphone manufacturers like Xiaomi, OPPO, Honor, etc. However, some of these manufacturers also purchase services from SenseTime. Facial recognition technology was first introduced to the public through Apple’s iPhone. Its facial recognition is supported by RealFace, a company in Israel and acquired by Apple in 2017 at USD 2 million.

Similar to an ML/CV (machine learning) startup, Megvii has the potential to grow into a unicorn.  From initially providing facial recognition solutions to camera apps and smartphone manufacturers, its business has expanded to IoT (internet of things), security, smart retail, logistics chains, etc.

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