SenseTime gets $600m funding
New financing lifts valuation of facial recognition startup to $4.5b
Chinese facial recognition startup SenseTime Group Ltd announced on Monday it has acquired $600 million in its Series C round of fundraising led by e-commerce giant Alibaba Group Holding Ltd, setting a record for venture capital funding in the artificial intelligence sector.
SenseTime will become the world’s most valuable artificial intelligence startup, with its valuation exceeding $4.5 billion after the fundraising. Other investors include Temasek Holdings and Suning Commerce Group Co Ltd.
The company said the capital injection will provide important impetus to the buildout of its AI platform, advancing the company’s technological innovation and opening up new business opportunities.
The latest financing will also bankroll investments in the fields such as autonomous driving, security and surveillance, intelligent retail, finance and education.
The move came after the AI startup completed a $410 million financing led by CDH Investments and Sailing Capital in July. SenseTime claimed it to be the world’s largest private financing round ever closed by an AI startup at that time.
Xu Li, co-founder and chief executive officer of SenseTime, said the company plans to use the capital to expand its presence overseas. “The funding will help us widen the scope for more industrial application of AI, thus increasing the value of SenseTime’s global ecosystem.”
“SenseTime is doing pioneering work in AI. We are especially impressed by their R&D capabilities in deep learning and visual computing. Our business at Alibaba is already seeing tangible benefits from our investments in AI and we are committed to further investment,” said Joe Tsai, Alibaba’s executive vicechairman.
This is Alibaba’s second major investment in a top Chinese AI company in recent months. In October, Alibaba’s financial arm Ant Financial Services Group joined a $460 million Series C financing round in another Chinese AI unicorn, Megvii Technology Inc, more commonly known as Face++.
Face++ provides facial recognition technology to Alipay’s “Smile to Pay” function, which allows users to pay using a facial scan on their smartphones.
Founded in 2014, SenseTime focuses on innovative computer vision and deep learning technologies, and has established partnerships with more than 400 leading domestic and overseas enterprises across security, fintech, automobile, retail, smartphone, mobile internet, robotics and smart city development.
Its partners include global chip giants Qualcomm Inc and Nvidia Corp, China UnionPay, smartphone maker Xiaomi Corp, Huawei Technologies Co Ltd, Oppo Electronics Corp and Vivo Mobile Communication Technology. It has also partnered with Honda Motor Co Ltd to develop autonomous driving systems.
China has placed great emphasis on tech development, with AI a key area.
The government has laid out plans to become the world leader in AI by 2030, with an aim of making the industry worth 1 trillion yuan ($158.4 billion).
The growth of China’s outbound direct investment and foreign direct investment remained stable and optimistic during the first quarter of 2018, the Ministry of Commerce said on Monday.
“The country’s ODI has seen an uptick for four months in a row, and from January to February the number has increased by 25.2 percent yearon-year,” said an official from the ministry’s Department of Outward Investment and Economic Cooperation.
The ministry predicted ODI will keep growing in the first quarter, further pushing industry structure upgrading. China will release the ODI figure for first quarter in the middle of this month.
“Eastern regions will remain active in conducting overseas investment, while the areas in western China will become new engine to power ODI,” the official said.
The investment cooperation between China and the economies involved in the Belt and Road Initiative will count for more of the country’s total overseas investment.
The infrastructure projects in those economies that need equipment, technology and services China provides will enhance bilateral and multilateral business relations, according to the ministry.
Domestic investors made $16.82 billion of nonfinancial ODI in 1,429 overseas businesses in 135 countries and regions for January-February, data from the Ministry of Commerce show.
Linklaters LLP, the international law firm, predicted that China’s outbound investment is projected to reach between $1.5 trillion and $2.5 trillion over the next decade, despite a backdrop of increasing regulatory and political concerns about foreign investment into sensitive sectors, the
We are now seeing more concern from the foreign regulators relating to Chinese investments ...”
Charles Jacobs,
firm said in a report released in March.
Charles Jacobs, chairman of Linklaters, said Chinese investors need to prepare for foreign governments’ growing concerns in a number of sectors.
“We are now seeing more concern from foreign regulators relating to Chinese investment, especially those involving data and cybersecurity,” he said.
“Working with the right partners and the right deal structures is useful — but getting the timing right is vital,” said William Liu, Linklaters’ China unit head.
“Chinese businesses must be aware that regulations in the United States and the European Union are being modified and may make investment more difficult,” said Li, citing “acquiring automobile manufacturers or licensing sensitive technology.”
On the other hand, the outlook for China’s FDI also proved to be optimistic, as the Ministry of Commerce foresees a stable capital inflow in the first quarter of the year and a rising number in the newly established foreign-invested companies.
“Foreign investment will spotlight the high-tech industry,” the ministry said. “Central and western China will see a rapid growth in FDI.”