Megvii, the owner of facial recognition technology company Face++, is in discussions with Alibaba Group Holding Ltd. and other investors as it seeks to raise at least $500 million of new funding, according to people familiar with the matter.
The Beijing-based company, which already counts Alibaba as a backer, is talking with Chinese private equity investors and is considering a valuation between $3.5 billion to $4 billion, the people said, asking not to be named because the matter is private. The financing, which the company hopes to close in December, would give Megvii ammunition to compete with local rival SenseTime Group Ltd., the people said.
Megvii provides face-scanning systems to companies including Lenovo Group Ltd. and Ant Financial, the payments company that underpins Alibaba’s e-commerce platforms. It’s competing with SenseTime, which is backed by Alibaba and SoftBank Group Corp., in sectors such as retail, finance, smartphone and public security systems.
Alibaba and Megvii declined to comment.
Megvii’s other investors include Boyu Capital, Ant Financial, SK Group, and the Russia-China Investment Fund, a venture backed by sovereign wealth funds of the two nations. It was said to have closed a round earlier this year, raising about $600 million from backers including Alibaba.