The blacklisted AI tech firm behind the renowned facial recognition firm Face++ has joined the Chinese government to form "Shandong Liaoyun Information Technology."
Beijing-based facial recognition developer MEGVII (旷视), which recently filed for a public listing in Hong Kong, has joined the Chinese state-owned city database E-Hualu (易华录, 300212:SZ) to form a joint venture company, Shandong Liaoyun Information Technology (山东聊云信息技术有限责任公司).
Liaoyun Information was set up on December 27, 2019, according to Chinese database firm, Tianyancha (天眼查), and was registered with a capital of CNY 300 million. The firm's business scope includes information integration services, engineering management services and electronic manufacturing services.
The new joint venture will strengthen cooperation between the private holding and the state-owned firm. In November, MEGVII received a "service package" from the government (the details of the package were undisclosed) which can be understood as a sign that the Chinese government is introducing policies to boost the development of the private economy in the background of the China-U.S. trade war.
MEGVII, the well-known company behind the face recognition company Face++, filed for Hong Kong IPO on August 26, with underwriters including renowned American investment firms such as Goldman Sachs (GS:NYSE), J.P Morgan (JPM:NYSE) and Citibank (C:NYSE).
However, the company had to delay its Hong Kong listing until 2020 after facing requests for more information by Hong Kong regulators, as the company was placed among the 27 companies in the trade blacklist issued by the US Department of Commerce, according to yahoo finance.
The AI startup has raised more than USD 1.4 billion in funding, accounting for seven rounds in total, increasing the company's value to around USD 4 billion. The latest funding round was raised on May 8, 2019, from a Series D funding round worth USD 750 million led by Bank of China Group Investment (中银集团).
No public information has yet been disclosed over whether the company will proceed with an IPO or the date it will be listed in 2020.
MEGVII is the second-largest shareholder of the new joint venture firm, with a 25% shareholding, while E-Hualu is the largest shareholder, with 35% of company shares. Others shareholders include investment firm Liaocheng Antai Urban and Rural Investment and Development (聊城市安泰城乡投资开发有限责任公司) and Liaocheng Caixin Investment (聊城市财信投资有限公司), each holding 20% of Shandong Liaoyun IT shares.