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Sensetime, the MVP of China's Computer Vision Startups, is About to Face the Utmost Challenge
Sensetime, the MVP of China's Computer Vision Startups, is About to Face the Utmost Challenge
Associated Company
SenseTime SenseTime

Sensetime (商汤科技) is definitely a star company among the AI technology startups, and even unicorns in China.

Founded on Nov 14, 2014, Sensetime had already raised a total funding amount of approximately USD 2.67 billion (estimated according to public data). Wrapped up with the latest funding round with the amount of USD 1 billion in Sep 2018, from SB China Capital, this AI tech company was valued at USD 6 billion, to be the most valuable Computer Vision unicorn in China, and this valuation actually exceeded the market capitalization threshold of the top 500 listed companies in China, 30 billion yuan, according to the data of 2017.

China's 5th national AI open innovation platform

Sep 20, 2018, the Ministry of Science and Technology of PRC officially announced relying on Sensetime to build a new generation of AI innovation open platform for Computer Vision. Since then, Sensetime has become the 5th national artificial intelligence innovation open platform, after Baidu(the autonomous driving open platform), Alibaba(the urban brain open platform), Tencent(medical imaging open platform), and iFlytek(intelligent voice open platform).

The announcement could be recognized as the symbol of government's recognition, which will project positive influences on the cooperation with the government. Plus, the signal gives the market some confidences, although it will not be the key consideration factor for Sensetime's clients.

By focusing on innovative computer vision and deep learning technologies, Sensetime tried to empower its skills in a variety of industries, including Intelligent Security, Terminal, Entertainment, Finance, Business, Remote Sensing, Robot Sensing and Control, Autonomous Driving, etc. The cross-industry technical applicability is the basis for Sensetime's responsibility as the builder of the “national open platform”.

Sensetime had its technology advantages, while which was not invincible

Sensetime was founded by TANG Xiaoou (汤晓鸥), who also founded the Multimedia Laboratory at the Chinese University of Hong Kong, which was the only one of the world's top ten artificial intelligence labs located in Asia and the R&D team had published more than 400 computer-vision-related papers on international leading academic journals and conferences. In 2014, Sensetime released its face recognition algorithm DeepID, which was claimed to be the world's first algorithm that could exceed human being's accuracy of face recognition.

However, on Nov 15 2018, the most updated Face Recognition Vendor Test Report released by NIST (National Institute of Standards and Technology) showed that Yitu Technology's two algorithms achieved the best performance and defeated Sensetime - the new entrant of this test.

Face Recognition Vendor Test Report

Additional algorithms not listed in the leaderboard can be found in Table 2 of the latest FRVT report. 

Although this test result could only be a reference material for the industry, it still indicated that Sensetime's technologies and algorithms are not invincible as it claimed.

Focusing on revenue would be more important for China's AI startups in 2018

Recently, while publishing his new book "AI·Future", LI Kaifu (李开复) had said that he thought that the concept of AI was way too popular in China, and many companies used "AI" just for raising money, which generated uncountable bubbles in the industry. "In the past three or four months, AI companies' valuation has dropped by 20%-30%. If it continues to drop another 20%-30%, the valuation would be reasonable, and we could start to increase investment", LI said.

The industry now commonly believed that the technology itself is not the key indicator anymore (which was indeed the key in 2017), and what matters now would be the practical application of technologies in varied industries.

Sensetime did an outstanding job in 2017 with an alleged revenue of USD 100 million and expected to triple its revenue this year, to $300 million, according to an article on Bloomberg. (The company declined to comment about this number)

According to EqualOcean's speculation, Sensetime, cooperated with the government, should have already achieved revenue goal from the security industry, which could contribute 70% of its total revenue and the rest 30% would be contributed by its cooperation with smartphone and software companies.

However, the biggest challenge for Sensetime would not be generating income, but to increase revenue rapidly.

In the Security industry, traditional players like Hikvision and Dahua Technology would not be easy to compete with, and as for the internet and computing device industry, clients themselves have good technical accumulations and always try to get rid of their technology suppliers.

On the other hand, the competition among the startups cannot be ignored. Nowadays, there are four AI unicorns related to Computer Vision in China, which is also believed to be unreasonable in LI Kaifu's opinion before in 2017. Although Sensetime currently has a relatively dominant position, it is still far away from where the company could be safe to loose its nerve.

- Author: ZHANG Fan; Write to ZHANG Fan at ZhangFan@EqualOcean.com

Enterprise Information

SenseTime is an artificial intelligence company that focuses on innovative computer vision and deep learning technologies.
CATEGORIES: AI
Last Funding Type
Series D
Number of Employees
2000+
Number of Funding Rounds
9
Total Funding Amount
2.89B

Enterprise Information

SenseTime
SenseTime is an artificial intelligence company that focuses on innovative computer vision and deep learning technologies.
CATEGORIES: AI
Last Funding Type
Series D
Number of Employees
2000+
Number of Funding Rounds
9
Total Funding Amount
2.89B

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