(Yicai Global) Dec. 7 -- SenseTime, China’s biggest artificial intelligence company, has started accepting subscriptions ahead of its HKD6 billion (USD769 million) initial public offering on the Hong Kong stock exchange on Dec. 17.

Priced at between HKD3.85 (USD0.49) and HKD3.99 each, SenseTime is issuing 1.5 billion shares, according to a filing to the Hong Kong Exchanges and Clearing yesterday. Subscriptions will close on Dec. 10.

Nine cornerstone investors have already offered to purchase around 60 percent of the shares, worth around USD450 million, the report said. They include the China State-owned Enterprise Mixed Ownership Reform Fund, Guosheng Overseas Holdings Hong Kong, Shanghai Artificial Intelligence Industry Equity Investment Fund, SAIC Motor Hong Kong Investment and GF Fund Management.

Sixty percent of the proceeds will be used to enhance research and development, including strengthening its AI chip design. The rest of the money will be used for business expansion, outbound investment and general corporate purposes.

Known for its facial-recognition technology, SenseTime was Asia’s largest AI firm by revenue last year with a market share of 14 percent, the IPO prospectus noted, citing research and consulting firm Frost & Sullivan.

Due to heavy R&D investments, SenseTime has never made a profit. The firm reported a net loss of CNY12.2 billion (USD1.9 billion) last year, versus CNY5 billion (USD773.2 million) in 2019 and CNY3.4 billion in 2018. Revenue grew to CNY3.4 billion in 2020 from CNY3 billion in 2019 and CNY1.9 billion in 2018.

The Hong Kong-based company has raised USD5.2 billion in 12 funding rounds since it was set up in 2014. In the past three and a half years it has spent CNY7 billion (USD1 billion) on R&D.

Editor: Kim Taylor