Chinese smart vehicles maker ENOVATE announced on Wednesday that it has completed raising over 5 billion yuan ($742 million) in a new fundraising round, ahead of its planned initial public offering (IPO) in 2021.
Shanghai-based ENOVATE did not specify the investors in the new round, but it said that the transaction was led by China’s local government industry guidance funds and large state-owned banks. Upon the completion of the new financing, the firm has kick-started the fundraising work for its pre-IPO round.
The development came after ENOVATE officially launched its first vehicle model, 5+X intelligent electric SUV ME7, this September at a starting price of 218,800 yuan ($32,456) after subsidies. The model is equipped with an interconnection screen, an intelligent driving system, AI-enabled driving assistance functions, as well as advanced technologies like facial recognition.
It also developed its second vehicle model, the ME-S — a four-door, fully-electric vehicle powered by solid state batteries. The firm said that the new model’s batteries can be recharged up to 80 per cent in just 15 minutes, and is expected to enter mass production in 2021.
The proceeds from the latest round will be used for the R&D and intelligent manufacturing of new vehicle models, improvement of the firm’s sales channel and service systems, as well as brand marketing, among other things.
In April 2019, ENOVATE raised over 2 billion yuan ($297 million) in a Series A round from large listed companies with participation from China’s government-led funds and other institutional investors. The previous round had brought the total capital raised by the firm to more than 6.5 billion yuan ($964 million).
China’s EV, smart vehicle players amass at least $3.3b
ENOVATE, founded in 2015, has joined a slew of domestic players seeking to cash in on the rapid development of the world’s largest automotive market.
China, home to half of the global EV population, has been at the forefront of the electric vehicle (EV) space according to a ResearchAndMarkets.com report released in March 2020. It also leads the world’s efforts in developing smart mobility solutions enabled by AI, big data, and the Internet of Vehicles (IoV).
At least 34 unlisted EV and smart vehicle firms have amassed over $3.3 billion in the first three quarters of 2020, according to proprietary data from DealStreetAsia. The largest financing in the sector was a 10 billion yuan ($1.47 billion) Series D round completed by Shanghai-based EV brand WM Motor in late September.
Before WM Motor, Alibaba-backed Xpeng Motors had raised about $500 million in July and had reportedly roped in another $300 million from investors including Qatar’s sovereign wealth fund in early August before its $1.5 billion IPO on August 26.
Li Auto, an EV maker backed by Chinese local services platform Meituan-Dianping, had also raised $1.1 billion in an IPO on Nasdaq in July.
Fundraising activity in China’s intelligent vehicle space has been mainly led by autonomous driving startups and companies developing solutions and systems for self-driving vehicles. Didi Chuxing‘s self-driving arm had raked in $500 million in its first external financing round led by SoftBank’s Vision Fund in May.