AI startup Yitu to list on Shanghai’s tech board: report
Sep 4, 2019
Artificial intelligence (AI) startup Yitu is considering a listing on China’s new Nasdaq-style tech board, Bloomberg reported, citing people familiar with the matter.
Why it matters: News of the possible listing comes shortly after rival AI firm Megvii submitted an IPO prospectus to the Hong Kong stock exchange, the first Chinese AI company to make such a move.
- AI technologies from both companies are used widely in China and they are key suppliers to the country’s public security organs.
- China is home to a growing number of AI startups, several of which have their eyes on capital markets.
Details: Yitu reportedly plans to list on Shanghai’s Star Market as early as this year, according to the Bloomberg report.
- No details of the listing have so far been revealed. The sources did not indicate how much Yitu is hoping to raise by going public.
- Since Yitu has not officially filed for an IPO, its financial position is unclear. However, Star Market allows unprofitable companies to apply for a listing.
Context: The IPO plans come amid government calls to stimulate China’s high-tech development, with ambitions to become a world leader in AI by 2030.
- The country is home to the world’s most valuable AI startup, Sensetime, though the company has not made public any plans for a listing.
- Before filing, Megvii had reportedly been reconsidering its IPO plans as a result of the ongoing US-China trade tensions.
Bottom line: China’s AI companies are looking to tap capital markets as venture funding slows and investors raise questions about the prospective profitability of these firms.