(Yicai Global) April 9 -- SenseTime Group Ltd. has become the world’s highest valued artificial intelligence startup following a new round of funding led by China's largest e-commerce firm Alibaba Group Holding Ltd.
The Beijing-based company is worth USD3 billion following a USD600 million C-round of financing, which also included Singaporean state-owned wealth fund Temasek Holdings Private Ltd. and home appliance retailer Suning.Com Co. as minor investors, Yicai Global learned from an industry insider.
SenseTime is one of a group of unicorns leading the AI charge in China, supported by the government’s ambitions to become a world-leader by 2030. The country dominated AI funding last year with Chinese startups accounting for a little under half of all financing pumped into the sector globally, leveraging China’s vast market and well-established data infrastructure.
The firm has ramped up financing efforts over the past 12 months, raising USD410 million in series-B financing last July, followed by a strategic investment in November worth tens of millions of dollars from Qualcomm Inc., the world's largest smartphone chipmaker. SenseTime is reportedly already planning its next funding round and aims to raise its valuation to USD4.5 billion.
SenseTime has remained one of the most sought-after targets for venture capitalists in recent years and has turned down several asset managers and even some major well-established dollar funds. Its management team has very strict criteria for selecting investors. When it comes to choosing investors -- be it a financial or a strategic investor -- the firm places a priority on whether the funds can bring “relatively large changes” to its businesses, President Xu Li told Yicai Global in a recent interview.
Xu also revealed that SenseTime will partner tech giant Alibaba in its smart city program and provide intelligent surveillance, smart transport, as well as urban management solutions. The company will also offer Hangzhou-based Alibaba its deep-learning technology as a technical framework in cities where it is needed.
Alibaba unveiled The Academy for Discovery, Adventure, Momentum and Outlook, also known as Alibaba DAMO Academy, last October, pledging to invest CNY100 billion (USD15.8 million) over the next three years in new technology development, with a focus on AI and smart city initiatives.
Leveraging its massive data and application resources, Alibaba will provide SenseTime with scenarios for businesses and consumers alike, as well as offering platforms for the latter’s innovative technologies.
Qualcomm, Suning Cooperation
Similarly, home appliance retailer Suning has chosen SenseTime as its technology provider for the introduction of AI technology at its unmanned stores and regular retail outlets. The partnership will run ever deeper as the retailer brings in more AI applications for consumers. Cooperation with Qualcomm will enable SenseTime to integrate its algorithms with chipsets, facilitating their use in smartphones and Internet of Things devices.
SenseTime was profitable across the board last year, with operating income growing more than five-fold from a year earlier. The company derives revenues from four markets: security, automobiles, smartphone and new businesses.
Intelligence security is SenseTime’s biggest revenue earner, accounting for 30 percent of the total. Smart cars and mobile internet chips make up 60 percent, while the remaining 10 percent is generated from new businesses, which include experimental-stage products like remote sensing, robotics and video. SenseTime did not provide further details on its earnings.