China’s NIO, Horizon Robotics gains fundraising momentum in car tech push

CEO Yu Kai – Photo: Bloomberg TV

Two Chinese firms are accelerating fundraising efforts to expand their foothold in self-driving and other advanced auto technologies, part of the country’s push to increase its influence as the car industry transforms.

NIO Capital, the investment firm affiliated to electric-vehicle startup NIO, is close to completing the first round of its $500 million offshore fund that will put money in new automotive technologies, according to people with direct knowledge of the matter. Horizon Robotics Inc., a startup seeking to dominate a market of 30 million autonomous-driving vehicles in China by 2025 with its chips, said it is to close a new round of financing to boost its research capabilities.

China has vowed to build a world-leading manufacturing sector with its Made in China 2025 plan as the second-largest economy moves upward in the value chain. Chinese investors have been pouring billions of dollars in developing or acquiring overseas technologies in the automobile sector as the electric, autonomous and shareable-vehicle concepts disrupt the industry.

Fueling the push is the U.S.’s effort to make it harder for Chinese competitors to access its technology market, Zhang Junyi, NIO Capital’s co-founder, said in an interview on Bloomberg TV. Those hurdles are a good incentive for Chinese companies to invest in fundamental technologies and basic research, he said.

“In the short term, it does have some impact on the economy,” Zhang said. “But in the long run, it will help us build a more solid 2025.”

Expanding Research

Yu Kai, founder and CEO of chipmaker Horizon Robotics, echoed Zhang’s comments in his interview on Bloomberg TV.

“The Trump administration’s decision probably will urge the Chinese government to spend more money on the type of core technology-oriented business,” Yu said.

Horizon Robotics is raising several hundred million dollars and is set to complete the round in May, with a global semiconductor company other than Intel Corp. and some Chinese and foreign carmakers becoming its new strategic investors, said Yu. The Beijing-based company plans to spend the money on expanding its research and development teams by hiring more software engineers and pushing forward its hardware architecture design, he said.

“For sure we are going to be the No. 1 player in China,” said Yu, confident the chipmaker understands what its carmaker customers desire. “We know exactly what their pain is and what their need is.”

Horizon Robotics and NIO are among companies touting their latest products at the Beijing International Automotive Exhibition starting this week.

Dollar Fund

NIO Capital company is discussing with sovereign-wealth funds, as well as energy and insurance companies in Asia and Europe as potential investors for its first dollar fund, said the people familiar with the matter, who asked not to be identified as the discussions are private. The first phase of the financing will be settled in a month or two, they said.

NIO Capital will also consider investing in the offshore units of some Chinese companies, the people said. A company spokeswoman declined to comment on the fundraising.

Shanghai-based NIO Capital has already invested in about 15 companies in car-sharing, autonomous driving, new automobile material sectors in China with a Renminbi fund targeted to raise 10 billion yuan ($1.6 billion) in total. Sequoia Capital is among its partners.

The investments include last November’s bet in Beijing-based Shouqi Limousine & Chauffeur, a state-owned ride-hailing company banking on demand for premium mobility services in China.

Horizon Robotics raised $100 million in December in a round led by Intel Capital Corp. The Chinese startup also counted Harvest Global Investments Ltd., Hillhouse Capital Management Ltd., Morningside Venture Capital Ltd., Linear Ventures and Wu Capital as investors in that round of financing.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.