SenseTime Group Ltd. has raised $620 million at a valuation of more than $4.5 billion just months after scoring a similar amount from investors led by Alibaba Group Holding Ltd. and Singapore’s state investment firm.
Fidelity International and Silver Lake Partners were among the investors in the latest financing, bringing the total amount raised by the three-year-old image recognition startup in the past six months to more than $1.2 billion and tripling its valuation in under a year. Tiger Capital, Qualcomm Ventures and Hopu Capital also participated. The latest funding will go toward research and talent acquisition, SenseTime said in a statement Thursday.
Investors are handing billions of dollars to Chinese artificial intelligence startups, hoping to ride a wave of support from a government intent on becoming the world leader in the technology by 2030. But the growing hype is encouraging everything from video services to language schools to claim AI as integral to their business to win funding. Some investors warn the sector could experience a downturn towards the end of this year if those companies fail to deliver revenue growth.
SenseTime specializes in systems that analyze faces and images on an enormous scale and works with policing bodies across China. The startup said it experienced 400% growth in each of the past three years as it encompassed more industries. Business contract revenue is up more than 10-fold so far this year, according to its statement.
The company’s a big contributor to the world’s biggest system of surveillance: if you’ve ever been photographed with a Chinese-made phone or walked the streets of a Chinese city, chances are your face has been digitally crunched by SenseTime software built into more than 100 million mobile devices. The country is ramping up spending on surveillance as it cracks down hard on restive parts of the country, including Xinjiang.
A key focus for SenseTime is its internal talent development program, that seeks to cut its reliance on externally-trained AI developers as the industry hits a global crunch. It’s an effort that will become increasingly important as the U.S. — currently the source of many of the world leading computer science graduates — drafts limitations on how long Chinese students can stay in the country.
Aside from Alibaba, it also counts Temasek Holdings Pte and retailer Suning.com Co. as investors. It’s the largest, according to CB Insights, of a plethora of private AI outfits.
Fellow facial-recognition startup Megvii Inc. raised $460 million last year, while smaller niche players from Yitu to Malong Technologies have also won funding. A key partner, Hangzhou Hikvision Digital Technology, is one of the world’s biggest suppliers of security cameras and developing its own competing AI technology.