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Exclusive: SenseTime eyes STAR market IPO after $1.5 billion fundraising - sources

BEIJING/HONG KONG (Reuters) - Chinese start-up SenseTime is considering an initial public offering (IPO) on China’s tech-focused STAR market after its latest fundraising that will value the company at $10 billion (7.6 billion pounds), three people with knowledge of the matter said.

FILE PHOTO: The logo of SenseTime is seen during a government-organised media tour at SenseTime office, in Shanghai, China June 3, 2020. REUTERS/Aly Song

The artificial intelligence company, which Washington put on a trade blacklist in October last year, is expected to raise $1.5 billion from the funding round which is due to be completed soon, two of the people said.

SenseTime, which provides technology-based applications including facial recognition,video analysing and autonomous driving, has been in talks with Chinese securities regulators for the Shanghai listing in recent weeks, one of the people said.

The plan for listing on China’s year-old STAR market for start-ups is still preliminary with size and timetable undecided, said the sources, who did not want to be named as the information is confidential.

Hong Kong-headquartered SenseTime declined to comment. The China Securities Regulatory Commission did not immediately respond to a request to comment.

One of the people said that SenseTime’s STAR listing process would take a while, and that there was no obvious valuation benchmark for investors as its main homegrown rival Megvii has not listed yet.

SenseTime’s founder Tang Xiaoou had told Reuters in 2017 that the start-up was considering a listing in U.S, Hong Kong, or China.

The U.S. ban has made an overseas listing difficult, if not impossible, as global investors and investment banks are likely to shy away from companies being targeted by the United States, two of the people said.

The company was among eight Chinese tech companies placed on the U.S. entity list in October amid trade tensions between Beijing and Washington. The U.S. alleges the companies have played a role in human rights abuses against Muslim minority groups in China.

SenseTime said at the time that it strongly opposed the U.S. ban and would work with relevant authorities to resolve the situation.

Reuters reported in December that the five-year-old start-up had told investors it expected its 2019 revenue to increase by more than 200% year-on-year to around $750 million despite China-U.S. tensions.

The company counts Qualcomm Ventures, part of U.S. semiconductor group Qualcomm, as one of its strategic investors. Other existing investors include SoftBank Vision Fund, HOPU Investment Management Company, Silver Lake Partners and Alibaba BABA.N.

Reporting by Yingzhi Yang and Cheng Leng in Beijing and Kane Wu in Hong Kong; Editing by Sumeet Chatterjee and Jane Merriman

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