According to a document released by the Hong Kong Stock Exchange on Monday, Chinese artificial intelligence startup SenseTime will begin offering shares on the exchange on December 7. The company will offer up about 1.5 billion shares with prices ranging from HK $3.85 to HK $3.99, raising up to HK $6 billion ($769.18 million).
In this IPO, SenseTime is expected to spend 60% on R&D, of which 35% is used to invest in SenseCore, the AI infrastructure created by the compan while 25% will be used for product development and other artificial intelligence technology research. Another 15% will be used for business development, emerging business opportunities and improving the market penetration of the company’s products and services in China and overseas. A further 15% will be invested in potential strategic investment and acquisition opportunities and the remaining 10% will be used for general operational needs.
SenseTime was established in 2014 and focuses on computer vision and deep learning technologies. In its prospectus, the company positions itself as an artificial intelligence software company that mainly develops artificial intelligence models, more specifically, algorithms, to empower the industry in the form of software, and generates revenue through software licensing and subscription fees.
From 2018 to 2020 and the first half of 2021, SenseTime achieved revenues of about 1.853 billion yuan ($290.65 million), 3.027 billion yuan, 3.446 billion yuan and 1.652 billion yuan respectively. In 2019 and 2020, the company’s year-on-year growth rate was 63% and 14%, and the year-on-year growth rate in the first half of this year was nearly 92%. According to Frost & Sullivan, SenseTime is the largest supplier of artificial intelligence software in Asia and the largest supplier of computer vision software in China in terms of revenue in 2020. The company held a Chinese market share of 11% last year.
According to the company’s prospectus, since its establishment, SenseTime has received a total of 12 investments, with a total financing amount of about $5.225 billion, about 34 billion yuan (the latest exchange rate). Among them, SenseTime completed two rounds of financing last year, raising nearly $2.3 billion. SoftBank is the largest external shareholder of SenseTime, currently holding 14.88% while Taobao holds 7.59%. Other investors include Primavera Capital Group and Silver Lake Partners, both of which hold over 3%. IDG holds 1.42%, China Structural Reform Fund holds 1.39%. Finally, Shanghai International Group, Sailing Capital and CDH Fund hold 1% respectively.