SenseTime, A China Based AI Start-Up Plans For An IPO

SenseTime Group is amongst the world’s leading artificial intelligence (AI) focused companies. The company primarily is focusing on deep machine learning and computer vision and is authorized by China’s Ministry of Science and Technology. SenseTime holds the 5th position in China’s national AI platform and is Entrusted to establish the Next-Generation Artificial Intelligence on Intelligent Vision.

The company had developed deep learning platforms and supercomputing centres that help AI technologies like image recognition, face recognition, text recognition, object recognition, remote sensing, autonomous driving, medical image analysis and video analysis. Presently the company is the largest AI algorithm provider in China.

The technology developed by SenseTime is used by multiple industries which include a smartphone, online entertainment, smart city, mobile Internet, real estate, education, finance, retail and automobile etc. The company provides AI algorithms and technology to over 700 clients and partners across the world. The company’s customer includes various world-renowned companies and institutions such as Qualcomm, Honda, Alibaba, SNOW, China Mobile, OPPO, Vanke, Sunac China, Weibo, Vivo, Xiaomi, NVIDIA, Massachusetts Institute of Technology (MIT), Suning, Wanda, UnionPay etc. The company is having its offices in multiple locations in China as well as overseas. The main offices are in Beijing, Shanghai, Hangzhou, Chengdu, Shenzhen, Hong Kong, Singapore, Kyoto and Tokyo.

The company is founded by Tang Xiaoou and is based out of Beijing and Hong Kong. Tang Xiaoou is also working as a professor at Hong Kong-based Chinese University. The company is enjoying fast growth and had become a leader among all AI start-ups based out of China. The company’s facial recognition algorithm is in great demand both by the public and private sector.

As per the SenseTime founder Tang Xiaoou, the company is growing at a rapid pace and is never face any shortage of funds. There are many big investors ready to invest in the company’s technology. The company doesn’t have any urgent need for IPO but at the right time, it will launch its IPO. IPO timeline is not yet fixed. It can be launched next year or after that depending upon the business sense. They will consider China, Hong Kong and the United States for their first initial public offering.

SenseTime recently had entered into a strategic partnership with the U.S. chipmaker Qualcomm (QCOM.O). Under the partnership, the U.S. chipmaker will invest in SenseTime to develop AI-enhanced chips. The company’s other investors include Chinese financial institutions such as Sailing Capital, CDH Investments and TCL Capital.

SenseTime’s facial recognition has a 1/100 million error rate and the company had already signed a deal worth $100 million for the development of autonomous driving technology. The company is having an exercise database of more than 10 billion images & videos and 2 billion faces.

Many AI start-ups have been helped by a government and are attracting large fundraising especially in the field of facial recognition which has helped China to become a world leader in the field of Artificial Intelligence.

The company had named its proprietary technology framework as Parrots and claims that its very much similar to Tensor Flow of Google (GOOGL.O) and Torch of Facebook (FB. O). The company’s facial recognition technology and visual object recognition technology is at par with the tech giant companies Facebook and Google. The company’s object recognition technology is capable of sorting 1,000 categories of objects.

The company also claimed that it is much ahead of its domestic rivals in terms of revenue, business area and client size. Presently the SenseTime’s technology is used by 14 sectors which includes high-performance computing and medical imaging.

China’s top three technology companies include Tencent Holdings (0700.HK), Alibaba Group (BABA.N) and Baidu Inc (BIDU.O). These big companies also have their own AI labs and are developing facial recognition technology. SenseTime is aiming to become a platform company that could dominate the market with its technology like the tech giants such as Google and Facebook.

As per the spokesperson from SenseTime, the company to launch its IPO (Initial public offering) is working closely with the CICC (China International Capital Corporation). The company will most likely launch its IPO in Hong Kong and may hire another two international banks for assistance with its Initial Public Offering.

As per the spokesperson from SenseTime, the company is still evaluating, and no decision had been made over its IPO plan. After receiving Series C+ funding in May 2018 the company was valued at USD 4.5 billion.

Megvii Technology, the strongest competitor of the SenseTime, is the owner of another AI company Face++. The Face++ is a Beijing based company and is planning to file for its IPO in Hong Kong. As per the report by the Mergermarket, Megvii Technology had hired JPMorgan and Goldman Sachs for assistance with their IPO.

As per the data provided by Deal Street Asia, Megvii was valued nearly US $4 billion and was in talks with Alibaba to raise a fund of around US $500 million. The company expected its IPO to raise between US $500 million and US $1 billion.

As per the Bloomberg report, the Chinese government had hired Megvii to work closely in the deployment of its facial technology in 260 cities and helping the police department with over 10,000 arrests. The company was also providing a facial algorithm to payment business of Lenovo and Alibaba.

Like its competitors, the SenseTime is an active investor in the start-up companies focusing majorly in the field of Artificial Intelligence. The company’s portfolio includes Ling.ai [Wu Ling Ke Ji] a storytelling robot developer, WeRide [Wen Yuan Zhi Xing] an autonomous driving start-up and Terminus [Te Si Lian] an IoT solutions provider.

As per the data provided by the news service, the company remained at the top position in the AI industry in China and received massive funding from its investors. In September 2018, the SB China Venture Capital made an investment of USD 1 billion in the company.

As per the data provided by the Mergermarket, in May 2018, the company received a Series C+ round funding from Tiger Global, Silver Lake, Fidelity International and Hopu Capital. In the year 2018, SenseTime also completed Series C round of funding worth USD 600 million which was participated by Suning Holdings Group, Temasek and was led by Alibaba.

SenseTime was also in talks with the SoftBank Vision Fund for an investment of about US $1 billion. The company had grown its business by 400 per cent in the last few years by expanding its customer on an industry basis.