On Friday, Reuters reported that Chinese AI company SenseTime’s IPO at the HKEx has been approved, in which the company plans to raise $1 billion. An investor of SenseTime and a person from the company confirmed that the IPO had received approval. The relevant person in charge of SenseTime declined to comment on the matter.
SenseTime was established in October 2014, and mainly focuses on the field of computer vision, such as face and identity recognition. Since its establishment, SenseTime has completed 12 rounds of financing for a total amount of $5.2 billion, of which more than $2 billion were completed in 2018 alone. In the past two years, there have been rumors that SenseTime would be listed on Hong Kong’s stock market.
The firm’s latest round of financing was completed in June 2021, and the valuation after financing reached $12 billion. According to the prospectus, there is sufficient cash flow in SenseTime at present. As of June 30, 2021, there were 8.93 billion yuan ($1.40 billion) in cash and cash equivalents in the company’s account, and 7.94 billion yuan of time deposits.
In terms of revenue, the prospectus shows that from 2018 to 2020, the revenue of SenseTime continued to grow, with 1.85 billion yuan, 3.03 billion yuan and 3.45 billion yuan, respectively. In the first half of this year, SenseTime’s revenue reached 1.65 billion yuan, an increase of 91.8% over the same period last year. The revenue mainly comes from the sales of software platforms, including software products, artificial intelligence products and related services.
However, the prospectus also shows that SenseTime lost 3.433 billion yuan in 2018, 4.968 billion yuan in 2019, 12.158 billion yuan in 2020 and 3.713 billion yuan so far in 2021. The accumulated losses in the three and a half years were 24.272 billion yuan. After deducting non-recurring gains and losses, such as changes in the fair value of preferred shares, the adjusted accumulated losses of the company were 2.862 billion yuan.
The huge loss is closely related to the high application cost and R&D investment that continuously burns money and other factors. According to the prospectus, in 2018, 2019, 2020 and the first half of 2021, the accumulated R&D investment of SenseTime was 6.991 billion yuan.