“The market’s aim is to foster the development of Chinese tech companies, allowing IPOs for companies in areas like AI, biotechnology, and clean energy.”
Determined to go public, controversial China-based facial recognition specialist Megvii has filed for an IPO on the Star Market in Shanghai.
As South China Morning Post reports, the IPO process is likely to take months. And in one sense, the filing is already long overdue, with Megvii – the owner of the Face++ facial recognition platform – having been thwarted in previous efforts to go public.
The company had sought to list on the Hong Kong Stock Exchange back in 2019, but was stymied by its placement on a United States blacklist of China-based companies based on reports that its technology had played a role in oppressive practices in the state of Xinjiang.
A subsequent investigation by Human Rights Watch cleared Megvii of wrongdoing in that case, but the company moved onto a new controversy in 2020, with The Washington Post reporting in December that Megvii had worked with Huawei on a biometric surveillance system that included a feature designed to specifically target Uighur Muslims, the minority group comprising the primary victim of China’s oppressive practices in Xinjiang.
Nevertheless, Megvii has found a new avenue to the public’s capital in the Star Market, a Shanghai-based securities exchange launched in 2019 under the orders of Chinese President Xi Jinping. The market’s aim is to foster the development of Chinese tech companies, allowing IPOs for companies in areas like AI, biotechnology, and clean energy.
Megvii is currently valued at over $4 billion, despite posting a loss for the first half of 2019 in its Hong Kong filings. The company’s private investors include Alibaba and its affiliate Ant, as well as Foxconn and Lenovo.
January 14, 2020 – by Alex Perala