WeRide, a Chinese autonomous vehicle company, is preparing for its initial public offering (IPO) in the U.S., following the easing of China’s effective ban on foreign IPOs. The company aims to achieve a valuation of up to $5.02 billion through its IPO. It plans to raise approximately $96 million, or potentially $111.3 million if the underwriters exercise their over-allotment option in full.
In addition to the IPO, WeRide has secured commitments from certain investors for a concurrent private placement, with shares worth $320.5 million already being purchased. Alliance Ventures, the venture arm of the Renault Nissan Mitsubishi Alliance, has agreed to buy $97 million worth of shares. Other investors include JSC International Investment Fund, Get Ride, and Beijing Minghong.
WeRide’s IPO and private placement aims to raise a total of up to $400 million, with $100 million coming from the IPO and an additional $200 to $300 million from the private placement. This would make it the largest IPO by a Chinese company on the U.S. stock market since Zeekr, a luxury EV startup owned by Geely, began selling shares in May.
WeRide initially filed confidentially for its U.S. IPO in March 2023. The company has raised a total of $1.39 billion at a $5.11 billion valuation. However, it has not secured any private funding since 2022, and venture capitalists have become more cautious about investing in autonomous vehicle companies with long paths to profitability. Going public will provide WeRide with the necessary capital to scale and remain competitive.
WeRide currently holds permits to operate autonomously in China, the UAE, and Singapore. It also has permits to conduct testing with and without a driver in California and is actively testing its vehicles in San Jose. In addition to its robotaxi operation, the company is developing a driverless robobus, robovan for goods delivery, robosweeper, and advanced driver assistance systems that can be sold to original equipment manufacturers (OEMs).
The company generated a revenue of $20.7 million in the first half of 2024, which is lower compared to the $25.5 million in revenue during the same period in 2023. However, it reported a loss of $121.3 million in the first half of 2024, slightly higher than the loss of $100.9 million in the first half of 2023.
WeRide plans to allocate 35% of the IPO proceeds to research and development, 30% to the commercialization and operation of its autonomous driving fleets, marketing activities for expanding into new markets, 25% to capital expenditures such as purchasing test vehicles, and the remaining 10% for general corporate purposes.
WeRide is not the only Chinese autonomous vehicle company looking to go public in the U.S. market. Its main competitor, Pony.ai, is reportedly preparing for a U.S. IPO after its previous attempts in 2021 fell through. Pony.ai had previously aimed for a $12 billion valuation through a SPAC merger but put it on hold due to concerns about Beijing’s crackdown on Chinese firms going public on foreign exchanges.
In conclusion, WeRide’s upcoming IPO in the U.S. marks an important milestone for the Chinese autonomous vehicle industry. The company’s valuation and fundraising goals demonstrate the growing interest in autonomous driving technology. As WeRide expands its operations and product offerings, it will face competition from other players in the market, such as Pony.ai. Nonetheless, going public will provide WeRide with the necessary capital to continue developing its technology and expand into new markets.