WeRide, a Chinese Self-Driving Car Startup, Eyes US IPO with a Valuation of $5 Billion

WeRide, an innovator in autonomous driving from China, is making its approach to enter the U.S. stock market, a move coming more than a year after China began to relax its restrictions on foreign initial public offerings (IPOs). The firm is aiming for a valuation that could reach up to $5.02 billion as it embarks on its IPO journey.

The company anticipates generating roughly $96 million through the sale of shares, which could increase to $111.3 million should the option for additional shares be fully utilized by its underwriters, based on an IPO pricing of $17 per American Depository Share (ADS). With 6.45 million ADSs being offered within a price bracket of $15.50 to $18.50 each, the IPO could potentially garner up to $119.4 million.

Moreover, a select group of investors has committed to a $320.5 million investment in a simultaneous private equity deal. Notably, Alliance Ventures, the investment arm of the Renault Nissan Mitsubishi Alliance, is set to invest $97 million. Additional participants include JSC International Investment Fund, Get Ride, and Beijing Minghong, as detailed in a regulatory document.

This financing news follows a Bloomberg report which suggested WeRide was targeting up to $400 million from its IPO and private placement combined, as per sources privy to the details. The report hinted at around $100 million expected from the public offering and an additional $200 million to $300 million from private investments.

WeRide has yet to make an official comment on these figures.

Should WeRide successfully list in the U.S., it would mark the biggest IPO by a Chinese entity in the U.S. since the introduction of Zeekr, a luxury electric vehicle startup owned by Geely, on the New York Stock Exchange in May. Since its introduction, Zeekr has observed a 48% decrease in its share value.

Initially, WeRide confidentially initiated the U.S. public listing process in March 2023. To date, the autonomous vehicle (AV) enterprise has secured $1.39 billion in funding, valuing the company at $5.11 billion according to PitchBook. The company’s last private funding was in 2022, and since then, venture capital investments in AV entities have seen a downturn, spotlighting WeRide’s need to leverage public financing for scaling and maintaining competitiveness.

WeRide has secured authorizations for autonomous operations in China, the UAE, and Singapore and possesses both driver-assisted and driverless testing permits in California, where it is also actively engaging in trials in San Jose. Besides a robotaxi service available to the public, the company is evolving a driverless robobus, robovan (for deliveries), and robosweeper, alongside developing advanced driver assistance systems intended for OEMs.

For the first half of 2024, WeRide reported revenues of $20.7 million, a decrease from $25.5 million during the same timeframe in 2023, facing a loss of $121.3 million in the first six months of 2024 compared to a $100.9 million loss in the prior year, as per a regulatory filing. The document also details plans to allocate 35% of the IPO earnings to R&D, 30% to commercialization and operational expansion of its AV fleets, 25% to capital expenses including test vehicle acquisitions, and the remaining 10% to general corporate purposes.

WeRide is not alone in its U.S. market aspirations among Chinese AV firms. Pony.ai, a leading competitor, is reportedly eyeing a U. S. IPO once more, after a previous attempt faltered in 2021. The company had been considering a public debut valuing it at $12 billion via a SPAC merger but paused plans amid regulatory uncertainties from Beijing about Chinese firms listing overseas.

This piece has been refreshed to include the latest estimations on WeRide’s projected valuation, its IPO fundraising targets, and specifics on private investment commitments. Initially published on August 9 at 10:15 am PT, this version provides the most current details available.