Megvii Inc., the developer of facial recognition system Face++, is reportedly raising at least $600 million from investors including Alibaba and Boyu Capital.
According to Bloomberg, the Beijing-based company already boasts investors such as Jack Ma’s Ant Financial and one of China’s largest state-backed venture funds.
Sources say this latest round of investing will close within weeks, and the company will then seek a second tranche of funding.
Megvii provides face-scanning systems to companies including Lenovo Group Ltd. and Ant Financial. Megvii’s software utilizes facial scans held in a Ministry of Public Security database taken from legal identification files on about 1.3 billion Chinese.
Last year, the company raised $460 million in venture capital funding, led by a Chinese state-owned venture capital fund and the Russia-China Investment Fund. The latter is backed by the sovereign wealth funds of China and Russia.
“Investment from the ‘national team’ [state-owned funds] means Face++ will receive much more policy support from the government, which will greatly benefit their development,” Leng Biao, professor of body recognition at Beijing University of Aeronautics and Astronautics said at the time. “But there are risks, too, because national team funding comes with restrictions on who can invest in them in [the] future.”
Other investors include Foxconn Technology Group, CCB International Holdings Ltd., Qiming Venture Partners and Sinovation Ventures.
As for this round of funding, Alibaba, Boyu and Megvii all declined to comment.
Sources revealed that Megvii will use a significant proportion of it to support retail initiatives, including applying its technology in unmanned stores.
It’s main rival is SenseTime, which is also backed by Alibaba, with both companies competing for market share in sectors such as retail, finance and smartphone and public security.
SenseTime is said to be in discussions to raise nearly $1 billion in funds from Softbank Group Corp.’s Vision Fund, according to sources.
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