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(Bloomberg) -- The future of China’s largest artificial intelligence company was thrown into question last year when it was blacklisted by the Trump administration. Today, SenseTime is thriving with growing demand for its facial recognition software, especially as local governments in China adopt its technology to battle the coronavirus.
The Hong Kong-based startup’s revenue surged 147% to 5 billion yuan ($720 million) in 2019 and its customer base increased by about 500 to 1,200 clients, according to co-founder Xu Bing. Sales are on track to climb 80% this year to about 9 billion yuan and gross profit could double, according to people familiar with the matter.
“We see business demand for ways to mitigate the virus outbreak on the rise,” Xu said in a phone interview. He and SenseTime declined to comment on revenue projections in an emailed statement.
That momentum has SenseTime contemplating an initial public offering. The company is close to completing a $1.5 billion funding round that values it at about $8.5 billion pre-money, paving the way for a stock sale, people familiar have said. The company -- whose backers include SoftBank Group Corp., Temasek Holdings Pte and Alibaba Group Holding Ltd. -- is leaning toward a dual listing in Hong Kong and China, the people added.
The Covid-19 pandemic has been extremely controversial ever since infections emerged in Wuhan eight months ago. Countries such as the U.S. blame Chinese authorities for censoring information about the outbreak that could have helped slow the spread. Now China’s economy is recovering quickly from the crisis, while the U.S. and many others struggle to get back on track.
Chinese authorities have succeeded by using laws and technologies that governments like the U.S. have resisted. When a cluster of Covid-19 patients flared up in northeastern China, the government installed sensors to guard the city’s subway entrances. The cameras provided by SenseTime detect whether the passengers are wearing masks, their temperature, and even their identities with their faces covered.
It’s an example of how the ruling Communist Party, once wary of private entrepreneurs, is now supporting technology companies that have come under attack from the Trump administration, including SenseTime, Huawei Technologies Co., Tencent Holdings Ltd. and ByteDance Ltd., parent of TikTok. The country has pledged to spend $1.4 trillion to develop its own tech industry and overtake the U.S. in key sectors.
Read more: AI Unicorn SenseTime Is Said to Mull Hong Kong, China IPO
In the case of facial recognition, concerns about privacy are taking a back seat while the country militantly traces and tracks outbreaks. Hard-line measures adopted by Beijing allow provincial governments, companies and residential complexes to deploy facial recognition devices with little resistance.