Robotaxi start-up WeRide delays US IPO days before Chinese approval expires

Amjad Ali August 25, 2024

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Chinese autonomous driving start-up WeRide has postponed its US initial public offering (IPO), citing the need for additional time to finalise necessary documents.

The company was looking to raise up to US$440 million in a New York listing originally scheduled for this week. WeRide said in a statement on Thursday that “the time required to update documents has taken longer than expected” and the company “is actively working on the necessary documents for the transaction”.

The delay, first reported by the International Financing Review, complicates WeRide’s plan to float on the Nasdaq, as Beijing’s approval for the deal is set to expire at the end of this week. It is unclear whether WeRide would have to seek an extension or reapply for a permit from the China Securities Regulatory Commission (CSRC) if it missed the deadline.

Under Chinese rules, WeRide, – Cayman Islands holding company operating primarily through Guangzhou Wenyuan Zhixing Technology and its subsidiaries in mainland China – needs a go-ahead from regulators to conduct an overseas IPO. The approval it obtained from the CSRC on August 25 last year is valid for 12 months.

WeRide last amended its prospectus and updated its filings with the US Securities and Exchange Commission on August 20.

Besides technical issues and paperwork, WeRide’s IPO is overshadowed by growing China-US geopolitical tensions, particularly in the technology sector. The US Department of Commerce is considering a ban on Chinese software in autonomous and connected vehicles, citing national security concerns, according to a Reuters report earlier this month.

WeRide was founded in 2017 by CEO Tony Han Xu, formerly the chief scientist at the autonomous driving unit of Chinese web search giant Baidu.

The start-up has obtained permits to operate autonomous vehicle services in China, United Arab Emirates and Singapore. Earlier this month, it received approval from California to test driverless vehicles with passengers.

In addition to robotaxis, WeRide also offers driverless buses and vans, street sweepers and advanced driver-assistance software.

WeRide is among a number of Chinese autonomous-driving unicorns that have received substantial backing, but are struggling to turn a profit.

To date, WeRide has raised US$1.4 billion from notable investors, including German car parts manufacturer Robert Bosch, Chinese carmaker GAC Group, Japanese firm Nissan Motor’s investment arm Alliance Ventures, Tokyo-based Mitsubishi Motors, French manufacturer Renault Group, and US chip designer Nvidia. Its financial investors include Qiming Venture Partners and IDG Capital.

According to its prospectus, WeRide last year booked a net loss of 1.95 billion yuan (US$268 million) on revenue of 402 million yuan. In the first half of this year, net loss narrowed to 882 million yuan.

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Amjad Ali August 25, 2024

0 0 2 minutes read