SenseTime due diligence report.

Oto Suvari
Aug 5 · 2 min read

The Hatchworks analysts have done due diligence about the upcoming SenseTime IPO.

SenseTime has raised $2.67B so far and aiming for more. If we take a look at the valuation of the company, then it currently stands at $5B. Analysts have reviewed their revenue in 2017, which was $100M and we get a P/R multiple of 50x based on calculations. Even if SenseTime achieves a 100% revenue growth over the next 4 years without failing, then they will still have a P/R multiple of 6x, equal to current competitors such as Megvii and Cloudwalk.

With such a high valuation, Hatchworks will not be investing in it. Without a valid audit and a definition of how net profitability and cash conversion is occurring on those revenues, we see no reason to become bullish at this stage. The total Hatchscore is 5 out of 10. Full details can be found on Hatchnet: www.hatch-net.com/companies

What is SenseTime?

SenseTime is committed to the development of innovative artificial intelligence technology and making positive contributions to economic, social and human development. SenseTime has a mission of “holding on to originality and let AI lead human progress”.

Big investors:

- Alibaba
- Softbank
- Temasek

Advisors and Bookrunners:

- China Renaissance
- Alibaba Group Holding Ltd.

What are the risks?

- Low revenue growth.
- Working within multiple sectors and on many different things, with no specific focus.

Competitors:

- Megvii
- CloudWalk
- Yitu Technology

Management team:

- Li Xu: CEO
- Bing Xu: Co-Founder
- Xiaogang Wang: Co-Founder

Slightly more detailed information can be found inside the report:

The Hatchworks Team


Legal Disclaimer — This report summary has been generated as a result of Hatchworks’ proprietary company vetting and filtering system. The level of due diligence conducted on investible assets conducted ranges from mediocre to significant, the latter being the case where Hatchworks has explicitly taken strategic positions in. By no means is the information in this file to be relied on as investment advice; this includes Hatchworks’ algorithmic composite score known as ‘Hatchscore’. Hatchworks has not received any compensation for this research. For more information you can reach us at info@hatchworksvc.com. This report is not for distribution in the United States of America. It is closed to U.S citizens. If you are a U.S. citizen, you should delete this report or return to sender.

Oto Suvari

Written by

Research & Development at Hatchworks & Neuchatel Ltd. Heading up the group’s R&D activities for Hatchworks, SPECTRE (www.spectre.ai) and linked projects.

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