AI Chip Startup Intellifusion Receives CNY 1 Billion, Prepares for IPO
In Shenzhen, the firm’s hometown, it is famous for its jaywalker identification technology.
Chinese tech media outlet 36Kr reported (in Chinese) on April 3 that Intellifusion, which develops machine learning accelerators for the edge, has carried out a round of pre-IPO funding, taking home an earth-shattering CNY 1 billion (around USD 141 million). Walden International, one of the chipmaker’s existing backers, was joined by Utrust Fund (粤财基金) and Forebright Capital (光远资本) to lead the deal. A handful of banks and venture capital organizations also injected some money into the company this time.
Founded in 2014, Intellifusion has become one of the most commercially successful Chinese Artificial Intelligence (AI) startups. According to iyiou.com, EqualOcean’s sister publication, it once doubled (in Chinese) the number of images recorded on the edge from 4 billion to 8 billion in just five months. As of April 2018, the startup had over 10,000 devices installed across the country.
Despite the company’s countrywide presence, localization was considered a principal growth catalyst in the first few years of its lifespan: the administration of Shenzhen, a 13-million-citizen megapolis, was glad to pay for technological solutions customized to resolve traffic issues (meanwhile, catching some red-light offenders). According to the South China Morning Post, in 2016 the public security bureau of the city’s Longgang district engaged the company in the project aimed at building a superior facial recognition algorithm capable of identifying one face out of 1 million.
The AI firm’s CEO, Chen Ning, has recently been appointed (in Chinese) as an advisor to the government of Bao’an, another district of Shenzhen. This nomination looks common: over the past years, we’ve seen many auspicious entrepreneurs from the private sector get 'enlisted' by the state. Take, for example, GigaDevice’s founder Zhu Yiming, who is now leading ChangXin Memory Technologies (CXMT), a four-year-old challenger that is projected to occupy China’s still-empty spot in the global Dynamic Random-Access Memory (DRAM) market.
Due to an almost infinite demand from the central government and a relatively low technological threshold, the surveillance industry has become a battlefield for multiple innovation-driven enterprises, making China the leader in the global facial recognition sector and boosting its machine learning capabilities at a larger scale.
Though mostly operating on long-term contracts, key players in the field are, like many others, suffering from the current pandemic. Hong Kong-based SenseTime, for example, postponed its IPO in March 2020.
As for hardware-focused AI chip startups, we’ve lately seen some good signs in the space, including embedded solution designer NextVPU’s CNY 300 million (USD 42 million) Series B in late March and Cambricon’s upcoming IPO on the Shanghai bourse’s tech board – the Star Market.