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Google-backed AI startup seeks US$1b valuation before its IPO

Hong Kong

GOOGLE-backed Mobvoi is close to securing funding that will value the artificial intelligence startup at more than US$1 billion before an initial public offering in China, people familiar with the matter said.

The smartwatch and AI software developer is seeking to raise US$100 million and plans to list on a proposed board for technology companies on the Shanghai bourse, the people said, requesting not to be named because the matter is private.

Mobvoi, Google's first direct investment in China after pulling its search engine in 2010, would be among the more prominent candidates for the new trading venue, envisioned as a capital-raising haven for rapidly growing firms. Backed by Sequoia and Zhenfund, it is among a raft of Chinese companies trying to grab market share from industry leaders such as Apple Inc.

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The seven-year-old startup has diversified its business from voice-search services to smart speakers and sports and designer smartwatches.

Mobvoi was valued at about US$300 million during a financing round led by Google in 2015. Founded in 2012 by a group of former Googlers, the Beijing-based startup forged a strategic partnership with Google through Wear operating system as well as Google Assistant. It has also attracted Volkswagen AG as a major investor through a 2017 funding round, forming a joint venture that develops AI for cars. Mobvoi has roughly 800 employees scattered throughout offices from Seattle to San Francisco.

Co-founder Li Zhifei said in 2017 that the company was targeting an IPO in the US or Hong Kong within two years. Mobvoi needed the capital to bankroll an expansion around the world, including into the US, as well as a growing pipeline of products, Mr Li said at the time. BLOOMBERG