17 October, 2024
China autonomous vehicle startup WeRide delays US IPO
WeRide is delaying plans to go public, according to CNBC. The self-driving tech company aimed to hit the Nasdaq this week, but now says it needs more time to complete the necessary IPO documents.
The firm, which develops autonomous vehicle technology for robotaxis, mini-buses and street sweepers, is seeking an IPO at a $5 billion valuation, and expects to raise around $93 million in proceeds.
WeRide’s IPO plans come as Beijing appears to have lifted restrictions on Chinese companies seeking foreign IPOs. Foreign direct investment into Chinese startups has dwindled since highs in 2022, so companies are seeking a new path to obtaining foreign funding.
Beijing’s approval for WeRide’s deal will expire this week, however, so the startup might have to present to Chinese regulators again if it misses its deadline.
TechCrunch has reached out to WeRide for more information.
China’s autonomous vehicle startup WeRide seeks US IPO at $5B valuation
WeRide, a Chinese autonomous vehicle company, is officially gearing up for a U.S. public debut, over a year after China started easing its effective ban of foreign IPOs. The company is seeking a valuation as high as $5.02 billion in its initial public offering.
WeRide expects to raise about $96 million from 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 and $18.50 per share, so it could even raise as much as $119.4 million in the IPO.
On top of that, certain investors have already agreed to purchase shares worth $320.5 million in a concurrent private placement. For example, 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, 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 sources familiar with the matter. About $100 million of that would come from the IPO and around $200 million to $300 million in the placement.
WeRide did not respond in time to comment.
If and when WeRide goes public, this will be the largest IPO by a Chinese company on the U.S. stock market since Geely-owned luxury EV startup Zeekr began selling shares on the New York Stock Exchange in May. Zeekr’s stock has 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 $5.11 billion valuation, per PitchBook data. But WeRide hasn’t raised a private round since 2022, and VCs have pulled back from writing large checks for autonomous vehicle companies with long roads to profitability. If WeRide hopes to scale and stay competitive, it’ll need to access the public markets.
The company holds permits to operate autonomously in China, the UAE and Singapore. It also has permits to test with a driver and without a driver in California, and is actively testing in San Jose. Aside from a publicly accessible robotaxi operation, WeRide is working on a driverless robobus, robovan (for goods delivery) and 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, which is lower than the first half of 2023’s 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 of $100.9 million in the first half of 2023.
Per WeRide’s filing, the company plans to spend 35% of the proceeds from its IPO on R&D; 30% on commercialization and operation of its autonomous driving fleets, as well as marketing activities to expand to new markets; 25% on capital expenditures like the purchase of test vehicles; and the remaining 10% for general corporate purposes.
WeRide isn’t the only Chinese AV company that’s looking to try its luck on the U.S. markets. Pony.ai, one of its main competitors, is also reportedly preparing for a U.S. IPO again, after its previous efforts fell apart in 2021. Pony was eyeing a public debut at a $12 billion valuation through a SPAC merger, but put it on hold as it struggled to gain assurances from Beijing that it wouldn’t become a target of a crackdown against Chinese firms going public on foreign exchanges.
This article has been updated to include WeRide’s estimated valuation, the total amount it hopes to raise, and information about investment from private placement. This article was originally published August 9 at 10:15 am PT.
China’s autonomous vehicle startup WeRide prepares for a US IPO
WeRide, a Chinese autonomous vehicle company, is officially gearing up for a U.S. public debut, over a year after China started easing its effective ban of foreign IPOs.
WeRide registered 1 billion American Depository Receipts (ADRs) at a maximum price of $0.05, with the aggregate offering coming in at $50 million, per a Friday filing with the Securities and Exchange Commission.
ADRs represent shares in a foreign company that are traded on U.S. stock exchanges, and offering them is a strong indication that WeRide is ready for a U.S. IPO.
The filing comes after Bloomberg reported that WeRide is seeking up to $400 million in its IPO and private placement, citing sources familiar with the matter. About $100 million of that would come from the IPO and around $200 million to $300 million in the placement. If Bloomberg’s sources are correct, that means the $50 million of ADSs could represent a portion of the IPO, or WeRide could be issuing more shares at a later date.
WeRide did not respond in time to comment.
If and when WeRide goes public, this will be the largest IPO by a Chinese company on the U.S. stock market since Geely-owned luxury EV startup Zeekr began selling shares on the New York Stock Exchange in May. Zeekr’s stock has 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 $5.11 billion valuation, per PitchBook data. But WeRide hasn’t raised a private round since 2022, and VCs have pulled back from writing large checks for autonomous vehicle companies with long roads to profitability. If WeRide hopes to scale and stay competitive, it’ll need to access the public markets.
The company holds permits to operate autonomously in China, the UAE and Singapore. It also has permits to test with a driver and without a driver in California, and is actively testing in San Jose. Aside from a publicly accessible robotaxi operation, WeRide is working on a driverless robobus, robovan (for goods delivery) and 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, which is lower than the first half of 2023’s 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 of $100.9 million in the first half of 2023.
WeRide isn’t the only Chinese AV company that’s looking to try its luck on the U.S. markets. Pony.ai, one of its main competitors, is also reportedly preparing for a U.S. IPO again, after its previous efforts fell apart in 2021. Pony was eyeing a public debut at a $12 billion valuation through a SPAC merger, but put it on hold as it struggled to gain assurances from Beijing that it wouldn’t become a target of a crackdown against Chinese firms going public on foreign exchanges.
Self-driving vehicle company Aurora cuts 3% of its workforce
Aurora Innovation, the autonomous vehicle technology company aiming to launch a “driverless” self-driving trucks business by the end of 2024, laid off dozens of workers this month, according to sources familiar with the action. The Pittsburgh-based company, which also has facilities in California, Colorado, Texas and Montana, has since confirmed that about 3% of its workforce was laid off in the beginning of the year, following an organizational review.
Aurora employed about 1,800 workers as of the end of 2023, according to the company.
“As we move toward commercial launch, we recently reviewed the entire organization to ensure we are working as effectively as possible and with the velocity required to achieve our ambitious goals,” according to an emailed statement attributed to Aurora’s senior vice president of people Cristopher Barrett. “Through this process, a limited number of roles were eliminated which impacted 3 percent of our total workforce. During the recent market uncertainty, we have been incredibly thoughtful in our resourcing in order to minimize such actions. We are grateful for the contributions of these individuals and are supporting them through this transition.”
The layoffs come as Aurora presses forward with plans to deploy a fleet of self-driving trucks that can navigate U.S. highways without a human driver behind the wheel. The company has said it expects to launch up to 20 driverless Class 8 trucks by the end of 2024. Initially, these driverless trucks — meaning no human behind the wheel — will carry freight between Dallas and Houston, a route the company has been using for testing.
Aurora is also working with automotive supplier Continental on a more than $300 million project to mass produce autonomous vehicle hardware for commercial self-driving trucks. Aurora recently wrapped up the first phase of the project, which allows Continental to work on developing prototypes ahead of its plan to begin production in 2027.
Developing autonomous vehicle technology that is safe enough for public roads has proven to be an expensive endeavor that has led to numerous startups shutting down or being acquired. That wave of consolidation kicked off in 2020 and persisted, thanks to economic headwinds, well into 2023.
Aurora, which was founded in 2017 by alumni of Tesla, Uber and Waymo, took the path to public markets in a bid to raise the capital needed to commercialize the frontier tech. Aurora became a publicly traded company in 2021 after merging with a special purpose acquisition company launched by LinkedIn co-founder and investor Reid Hoffman, Zynga founder Mark Pincus and managing partner Michael Thompson.
Aurora has emerged as one of the last remaining companies focused on commercializing self-driving big rigs. Kodiak Robotics, which is privately held; Torc Robotics; and Sweden’s Einride are also working on self-driving trucks. Still, it hasn’t always been the smoothest of roads, as the high cost of employing engineers to develop the technology combined with economic headwinds has chipped away at capital.
In 2022, a leaked memo sent by Aurora CEO and co-founder Chris Urmson presented a swath of cost-cutting and cash-generating options to its board, ranging from a hiring freeze and spinning out assets to a small capital raise, going private and even selling itself to high-profile tech companies Apple and Microsoft.
The company assured investors it had enough money to get to mid-2024, and while some cost reductions were made, real relief came in July 2023 when it completed a capital raise of $820 million from a public and concurrent private offering of its stock.
The company said at the time that the stock sale would help fund it through commercial launch at the end of 2024 and “well into 2025.” Aurora reiterated its financial position in its third-quarter 2023 earnings report and said it expects its total liquidity of $1.5 billion to support its planned commercial launch and fund operations into the second half of 2025.