Chinese artificial intelligence startup Yitu Technology is the latest to join the sector’s fundraising spree of late as it closed its series C+ round of fundraising on Wednesday, marking the third AI developer to tap private funding over the last three months.
Shanghai-based Yitu said it raised $200 million from ICBC International and SPDB International, the respective international businesses of Industrial and Commercial Bank of China and Shanghai Pudong Development Bank. Jiangsu G-Cheng Venture Capital also participated in the funding round.
These new investors join existing backers including Hillhouse Capital, Yunfeng Capital, Sequoia Capital, Gaorong Capital and ZhenFund, which invested in the AI startup in its Rmb380 million ($60 million) series C round of funding in May last year.
The latest fundraiser values Yitu at around $2.3 billion and confirms its unicorn status.
Yitu said the new capital will be used for developing smart healthcare solutions, one of the company’s four core areas of research and development.
Founded by Leo Zhu, a post-doctoral fellow at the Massachusetts Institute of Technology’s AI laboratory, Yitu researches and develops facial recognition algorithms for healthcare, security, finance and smart city applications.
The six-year-old company is best-known for its AI-supported security systems used by government agencies including China Immigration Inspection and China Customs Authority.
Its facial recognition program is capable of identifying over 1.8 billion faces and has been deployed at large-scale events such as the G20 Summit, BRICS Summit and the Boao Forum for Asia.
In finance, Yitu provides AI solutions to China Unionpay, China Merchants Bank and JD Finance, among others. It also counts leading technology giants like Tencent, Microsoft and Huawei as strategic partners.
BATTLE FOR CASH
Artificial intelligence startups are undoubtedly the centre of attention in China’s private equity market of late as their pursuit of new capital to develop next-generation applications gathers pace.
Over $2.2 billion of private capital was invested in leading Chinese AI developers in the last three months alone. SenseTime, a R&D startup on deep learning technologies, raised a total of $1.2 billion in its series C+ funding round in late May and series C round in early April.
In early May, Shenzhen-based humanoid robotic developer UBTECH Robotics raised $820 million from the likes of Tencent, Telstra and CDH Investment in the largest ever private fundraising for a Chinese AI startup.
To be sure, facial recognition is one of the hottest R&D areas in China since demand for the cutting-edge technology is enormous.
The government is betting on the technology to prevent crimes and track suspects by analysing their faces, as well as to monitor its vast population of 1.4 billion people. Banks, hotels and airports are also keen to access the technology to verify people’s identities.
Apart from SenseTime, Yitu is competing with the likes of Face++ and CloudWalk in the development of facial recognition technologies.
Face++, officially known as Megvii, raised $460 million in October last year, a month before Guangzhou-based CloudWalk raised $80 million.