WeRide IPO: China Autonomous Vehicle Firm Targets $5B Valuation
WeRide IPO: China Autonomous Vehicle Firm Targets $5B Valuation
The Chinense autonomous driving company has filed with the SEC for an initial public offering
China’s autonomous driving company, WeRide, has filed for an initial public offering (IPO).
The U.S. IPO aims to list 6.45 million American depositary shares at $15.50 to $18.50.
The potential listing comes as the U.S. prepares to crack down on sales of vehicle software by China.
WeRide, a Chinese autonomous driving startup, filed paperwork with the Securities and Exchange Commission (SEC) on Friday for an initial public offering (IPO). The filing seeks a valuation of up to $5 billion and aims to raise up to $120 million through the issuance of 6.45 million American depositary shares and a concurrent private placement of about $320 million. The proposed ticker symbol for the Nasdaq listing is WRD.
This IPO would mark the first filing of that size since the Chinese electric vehicle company ZeeKr listed earlier this year. The IPO market for Chinese companies has been nearly non-existent since Didi Global’s 2021 listing, which ended with a delisting after the company failed to get Beijing’s complete blessing.
Chinese regulators launched an investigation into Didi shortly after listing, which prompted U.S. regulators to warn that any subsequent listing must explain regulatory risks from Beijing. However, WeRide received approval from Chinese regulators last year to move forward with a listing in America.
WeRide reported a $123 million loss for the first half of this year, according to its prospectus. The filing shows a need for capital amid a pullback in private equity funding for electric vehicle companies, which face an increasingly hard runway to profitability in a higher global rate environment.
WeRide has already secured interest from large investors, with Alliance Ventures, the venture capital fund of the Renault Nissan Mitsubishi Alliance, agreeing to purchase about $97 million in shares, and JSC International Investment Fund SPC putting $69.5 million into the IPO, according to the SEC filing.
The listing will serve as a test to gauge investors’ appetite for Chinese companies at a time when protectionist policies are on the rise. Bloomberg reported earlier this month that the Biden administration is preparing to put limits on the sale of Chinese vehicle software, including autonomous vehicle technology.
The WeRide listing’s main underwriters, Morgan Stanley (MS) and J.P Morgan Chase (JPM), plan to take the company public as soon as this year.
Meanwhile, markets are also waiting for more news on a listing from Pony.ai, one of WeRide’s competitors in China. In any case, it could be an interesting second half of the year for the IPO market and Chinese listings.
Thomas Westwater,a tastylive financial writer and analyst, has eight years of markets and trading experience.@fxwestwater
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