Anika Begay
WeRide, a Chinese autonomous vehicle company, is officially preparing for a public debut in the United States, more than a year after China began easing its effective ban on foreign IPOs. The company is seeking a valuation of up to $5.02 billion in its initial public offering.
WeRide expects to raise approximately $96 million in its offering, or $111.3 million if its underwriters exercise their over-allotment option in full, assuming an IPO share price of $17 per American Depository Share (ADS). The company is offering 6.45 million ADSs at a price range of $15.50 to $18.50 per share, so it could even raise as much as $119.4 million in the IPO.
In addition, some investors have already agreed to buy $320.5 million worth of shares in a simultaneous private placement. For example, Alliance Ventures, the venture arm of 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, according to a regulatory filing.
The filing comes after Bloomberg reported that WeRide is seeking up to $400 million in its IPO and private placement, citing people familiar with the matter. About $100 million of that would come from the IPO and about $200 million to $300 million in the placement.
WeRide did not have time to comment.
If and when WeRide goes public, it will be the largest IPO of a Chinese company on the U.S. stock market since Geely-owned luxury electric vehicle startup Zeekr began selling shares on the New York Stock Exchange in May. Zeekr’s shares have fallen 48% since its debut.
WeRide initially filed confidentially to go public in the U.S. in March 2023. The AV company has raised a total of $1.39 billion at a valuation of $5.11 billion, according to PitchBook data. But WeRide hasn’t raised a private round since 2022, and VCs have been shying away from writing big checks to autonomous vehicle companies with long paths to profitability. If WeRide hopes to grow and stay competitive, it will need to enter the public markets.
The company holds permits to operate autonomously in China, the United Arab Emirates, and Singapore. It also has permits to test with and without a driver in California and is actively testing in San Jose. In addition to a publicly accessible robotaxi operation, WeRide is working on a driverless robobus, a robovan (for delivering goods), and a robosweeper. The company also offers advanced driver assistance systems and plans to sell them to OEMs.
WeRide’s revenue for the first six months of 2024 was $20.7 million, down from its first-half 2023 revenue of about $25.5 million, according to a regulatory filing. That’s on a loss of $121.3 million for the first half of 2024 and a loss of $100.9 million for the first half of 2023.
According to WeRide’s filing, the company plans to spend 35% of its IPO proceeds on research and development; 30% on marketing and operating its self-driving fleets, as well as marketing efforts to expand into new markets; 25% on capital expenditures such as purchasing test vehicles; and the remaining 10% for general corporate purposes.
WeRide isn’t the only Chinese AV company looking to try its luck in U.S. markets. One of its main competitors, Pony.ai, is also reportedly gearing up for a U.S. IPO again, after its previous efforts failed in 2021. Pony had been eyeing a public debut at a $12 billion valuation via a SPAC merger, but put it on hold as it struggled to get assurances from Beijing that it wouldn’t become the target of a crackdown on Chinese companies going public.
This article has been updated to include WeRide’s estimated valuation, the total amount it hopes to raise, and information about its private placement investment. This article was originally published on August 9 at 10:15 a.m. PT.
