Benzinga | Mar 12, 2021 12:01PM EST

Alibaba-Backed Chinese AI Startup Megvii Sets For Shanghai IPO: Bloomberg

Alibaba Group Holding Ltd (NYSE: BABA)-backed Megvii Technology Ltd is set to become the first major Chinese artificial intelligence (AI) start-up to go public after filing for a Chinese Depositary Receipt (CDR) offering on the Shanghai's Star board on Friday, Bloomberg reports.

* The start-up plans to issue up to 253 million Class B shares to raise at least $925 million (6 billion yuan) after fees, which would be utilized to fund R&D in robotics, visual IoT, and infuse capital. CITIC Securities Co Ltd (OTC: CIIHF) (OTC: CIIHY) is the listing sponsor.

* Megvii specialized in facial recognition. China's security fixation led to a major boost to the eight-year-old firm by triggering a nationwide video surveillance boom.

* The company recorded a loss of $160 million (1.03 billion yuan), excluding one-time items, in the first nine months of 2020.

* The company's application for a Hong Kong listing about two years ago failed after being blacklisted by the Trump administration over alleged involvement in human rights violations against Muslim minorities in China.

* Megvii joined the likes of Lenovo Group Ltd (OTC: LNVGF) (OTC: LNVGY), capitalizing on the CDR program kicked off by Beijing three years back to attract capable start-ups and big names.

* Price action: BABA stock was down 3.84% at $231.55 on the last check Friday.