By Greg Gao

(JW Insights) Jul 18 -- Megvii Technology(旷视科技), an Alibaba-backed facial recognition software firm, has prepared to go public in Shanghai again after failed attempts in Hong Kong and Shanghai amid headwinds in the United States, reported Yicai Global on July 17.

The Shanghai Stock Exchange has restarted Megvii's registration process after the firm updated its financial information, the bourse disclosed recently.

Megvii is trying its luck again as the firm suspended its planned share offering on the Star Market in March without registration approval in 22 months after passing the review in September 2021.

The deep learning startup first filed its prospectus with the Hong Kong Stock Exchange as early as August 2019 but the business environment changed shortly after. In October, the US commerce department listed Megvii as an entity believed to be involved in activities that are contrary to US foreign policy interests. Consequently, the artificial intelligence firm shifted its focus to the mainland capital market.

If successful, the company registered in the Cayman Islands with a variable interest entity structure will become the third firm to issue Chinese depository receipts. Megvii plans to raise over RMB6 billion ($836.4 million) by issuing no more than 253 million CDRs, according to the prospectus. The proceeds of the listing will be spent on basic research and development, Internet of Things solutions, robots, and sensor R&D.

Ant Group and Taobao China Holding, two affiliates of e-commerce giant Alibaba Group Holding, hold a combined 29.4 percent stake in Megvii, according to the prospectus. But founders Yin Qi, Tang Wenbin, and Yang Mu are the de facto controllers even though they own a total of 16.8 percent of Megvii's equity.

Founded in October 2011 and based in Beijing, Megvii is best known for its facial recognition software used in mobile payments. It is one of the country’s four so-called AI dragons, which include SenseTime (商汤科技), Yitu (依图科技) and CloudWalk (云从科技).

The AI startup was in the red at the time of filing the prospectus. In the first half of 2021, its deficit tallied RMB1.9 billion($265 million). In 2020, it was RMB3.3 billion($460 million), narrowing by half from 2019, according to the Yicai Global report.