WeRide, A Chinese Autonomous Vehicle Start-Up, Gears Up for an IPO in the US

Chinese autonomous driving firm WeRide is setting its sights on the U.S. market for an initial public offering (IPO), following China’s relaxation of its restrictions on foreign public listings more than a year ago.

In preparations for its public offering, WeRide has filed to register 1 billion American Depository Receipts (ADRs) with a ceiling price of $0.05 each, aiming for a total offering size of $50 million, according to a recent submission to the Securities and Exchange Commission on Friday.

ADRs are essentially shares of foreign corporations that are available for trading on American stock exchanges, indicating WeRide’s readiness to launch an IPO in the United States.

This move was hinted at in a Bloomberg report, which suggested WeRide might be aiming for up to $400 million through its IPO and associated private placements, based on inside sources. It’s believed that $100 million could be raised through the IPO, with an additional $200 million to $300 million from private placements. This suggests the $50 million from ADRs could be just a portion of the overall fundraising strategy, or there could be plans for issuing more shares later on.

WeRide had no comment at the time of inquiry.

Should WeRide proceed with its IPO, it would be the most significant public offering by a Chinese corporation in the U.S. market since Geely’s luxury EV branch, Zeekr, began trading on the New York Stock Exchange in May. Since its launch, Zeekr has seen a 48% decrease in stock value.

WeRide confidentially initiated the IPO process in the U.S. in March 2023 and has accumulated $1.39 billion in funds, reaching a valuation of $5.11 billion, as reported by Pitchbook. Its last venture round was in 2022, and since then, the venture capital enthusiasm for autonomously driven vehicles, due to their prolonged path to profitability, has cooled. For WeRide to grow and maintain its competitive edge, entering the public markets is essential.

WeRide is authorized for autonomous operations in China, the UAE, and Singapore, and holds permits in California for both accompanied and unaccompanied test drives, actively testing its technologies in San Jose. It has developed a variety of autonomous vehicles including a robotaxi service, a driverless bus, a delivery robovan, and a cleaning robosweeper, as well as advanced driver assistance systems aimed at original equipment manufacturers (OEMs).

In the first half of 2024, WeRide reported revenues of $20.7 million, a drop from the first six months of 2023’s $25.5 million, according to regulatory documents. This comes alongside a loss of $121.3 million in the first half of 2024, widening from a loss of $100.9 million in the corresponding period of 2023.

WeRide is not alone in its quest for the U.S. market; Pony.ai, a leading competitor, is also rumored to be considering a U.S. IPO once more, after a failed attempt in 2021. Previously targeting a $12 billion valuation through a SPAC merger, Pony.ai’s plans were delayed amidst regulatory uncertainties and concerns over intensified scrutiny by Beijing on Chinese firms listing abroad.