AI China startup Megvii is targeting …

Chinese artificial intelligence provider Megvii, commonly known as Face ++, aims to raise $ 500 million in a new round of financing that sets the company’s current valuation at $ 3.5 billion, people with knowledge of the matter said.

Bank of China Group Investment Ltd, the private equity (PE) arm of the state bank, is looking to lead the fundraiser with $ 200 million, two of the people, who declined to be named as the information is confidential, told Reuters. Terms of the fundraiser have not been finalized, the people added.

Beijing-based Megvii declined to comment. The PE arm of the Bank of China did not respond to a request for comment.

Megvii’s latest fundraiser comes amid Beijing’s plans to build a ubiquitous closed-circuit surveillance (CCTV) network and become an international leader in AI, a technology that is increasingly becoming key to various sectors.

The logo of the facial recognition software Face ++. Image: Reuters

Chinese and some foreign investors are pouring money into start-ups that specialize in AI, given Beijing’s emphasis on technology. Investments in the sector rose to about $ 2 billion this year through 75 deals, more than four times the total value in the previous two years, according to Refinitiv data.

Technology has caught the attention of companies, from healthcare to financial services, seeking to use algorithms to analyze large amounts of data to recognize patterns and solve problems. It is also slated to roll out to driverless cars and service robots in the future.

Megvii’s rival, SenseTime Group Ltd, raised $ 620 million in May with a valuation of more than $ 4.5 billion, following a $ 600 million round in April led by Alibaba.

Earlier this year, Alibaba also invested $ 327 million in Megvii, the startup behind e-commerce giant Alipay’s “scan your face to pay” feature, a fundraising document reviewed by Reuters.

Alibaba and Megvii declined to comment on the investment.

In 2017, Megvii raised $ 460 million from investors, including the China State Capital Capital Investment Fund, Ant Financial, and Foxconn Technology.

Founded in 2011 by Yin Qi and his two friends from Tsinghua University’s prestigious computer science pilot program, Megvii provides facial recognition and other AI technology to businesses and governments.

Megvii account Alibaba, Financial ant, Lenovo Group and Huawei As key clients and serving government entities and state enterprises, it displays its website.