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State-backed facial recognition firm CloudWalk teases future IPO in China

Its clients include airports, public security systems, and 400 banks in China.

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Guangzhou-based artificial intelligence company CloudWalk, which claims to be an AI unit of the Chinese government, has started to receive pre-listing tutoring, a necessary step for an initial public offering (IPO) in China, according to information disclosed by the Guangdong branch of the China Securities Regulatory Commission on Wednesday.

China Securities will tutor the company, which is designed mainly to help its management and key sharesholders with legal procedures, accounting knowledge, and corporate governance improvement.

The government agency did not reveal which board Cloudwalk’s shares will be listed, nor any accouting information relating to the company.

ClouWalk was incubated by China Academy of Sciences as early as 2006 and spun off as an independent company in 2015.

The company’s in-house developed facial recognition technologies have been widely used in Chinese government’s public security systems, airports, including Beijing Capital International Airport and Shanghai Pudong International Airport, as well as 400 banks, including the Industrial and Commercial Bank of China and Bank of Communications, according to 36Kr.

CloudWalk has also offered its technologies to home appliance maker Haier, retailer Gome, and Starbucks in China.

The company has raised about RMB 5.6 billion (USD 809 million) from investors including ICBC International and Guangzhou Nansha Financial Holding, according to Crunchbase. CloudWalk raised RMB 1.8 billion (USD 260 million) in May this year from State-backed China Internet Investment Fund, 36Kr reported.

CloudWalk’s IPO plan comes as another two major facial recognition companies including Megvii and Sensetime are reportedly seeking capital domestically to boost their growth.

Megvii, which has applied for a Hong Kong IPO since August 2019 but got its listing plan checked after the company was put on the US government’s Entity List, has hinted a future listing on the Shanghai Stock Exchange’s Science and Technology Innovation board, also known as the Star Market, according to KrASIA.

Sensetime is exploring a dual listing in Hong Kong and the Chinese mainland after a USD 1.5 billion pre-IPO financing round, Bloomberg reported last week.