HONG KONG (Reuters) - Chinese private equity backed artificial intelligence (AI) company SenseTime Group plans to raise about $500 million in a new funding round, people familiar with the move said, in what would be the biggest ever such fundraising by an AI startup.
Hong Kong-based SenseTime and its rivals are cashing in on heightened investor interest in AI firms that is being stoked by a major push by China into the area.
Reuters reported earlier this week that SenseTime and its main backer, Chinese buyout firm CDH Investments, were separately raising a $450 million AI investment fund, amid Beijing’s drive to be a leader in AI, a technology that is increasingly becoming key to various sectors.
Once the preserve of researchers, AI has grabbed the attention of businesses from healthcare to financial services looking to use algorithms to comb through large troves of data to recognize patterns and solve problems.
The technology is set to spread to driverless cars and service robots in the future.
The latest fundraising will value SenseTime at about $2 billion, said the people. Two of them added the funding round has attracted interest from prospective investors including Singapore’s sovereign wealth fund Temasek [TEM.UL].
Responding to a request for comment, SenseTime said in an email to Reuters that it had “attracted lots of interest” from investors in this financing round without elaborating. Temasek declined to comment. The people declined to be identified as the financing plans were not public.
The Hong Kong startup said earlier this week that it had kicked off the Series-C financing round, which is scheduled to close by the end of the year. But it had not given further details on the plan.
SenseTime provides technology-based applications including autonomous driving, facial recognition and video analyzing. The three-year-old firm counts China’s Ministry of Public Security and local heavyweights such as China Mobile, HNA Group and Huawei Technologies as its major clients.
China in July unveiled a development plan to grow the country’s core AI industries’ value to more than 150 billion yuan ($22 billion) by 2020 and 400 billion yuan by 2025.
Underpinned by Beijing’s AI emphasis, SenseTime and rival Megvii, the biggest facial recognition firm in China, have become new darlings of state and private investors.
Megvii, more commonly known as Face++, earlier this week raised $460 million in a fresh round of financing, drawing investment from a Chinese state venture fund and Ant Financial.
SenseTime itself raised $410 million in July, in a round led by CDH and state-backed fund Sailing Capital that valued it at over $1.5 billion.
Last month, SenseTime said it was teaming up with Qualcomm Technologies Inc, a unit of U.S. chipmaker Qualcomm (QCOM.O), to extend AI technology into a broad range of mobile and internet devices.
Reporting by Julie Zhu and Kane Wu; Additional reporting by Sijia Jiang; Editing by Sumeet Chatterjee and Muralikumar Anantharaman