Chinese lidar developer Hesai rakes in $300m funding after halted STAR Market IPO

Hesai Technology, a Shanghai-based startup that develops lidar sensors for autonomous driving and other robotics applications, has raked in $300 million in a Series D round of financing jointly led by investors including Hillhouse Capital’s GL Ventures and smartphone maker Xiaomi Corp.

Chinese food delivery giant Meituan and China’s CITIC Private Equity Funds Management (CPE) were also lead investors of the new round.

Other investors include Chinese securities firm Huatai Securities’ US dollar fund, as well as Hesai’s existing shareholders Lightspeed China Partners, and Qiming Venture Partners.

In a WeChat post on Tuesday, Lightspeed China, a lead investor of Hesai’s Series B, C rounds, said that it has by far poured a total of over $100 million into the startup.

Established in Silicon Valley in 2013 and relocated to Shanghai in 2014, Hesai focuses on the development of laser-based lidar sensors, a key self-driving component that helps autonomous vehicles detect objects ahead and around them.

Its products and technologies power autonomous driving vehicles under partnerships with companies like Silicon Valley’s self-driving truck startup Kodiak Robotics, as well as the self-driving units of Chinese search engine giant Baidu and food delivery firm Didi Chuxing.

The startup has developed a portfolio of products consisting of mechanical lidar, solid-state lidar, and an all-in-one sensing kit. Its latest offerings include PandarXT, a mid-range lidar designed for applications in unmanned logistics, robotics, mapping, security, and low-to-medium-speed autonomous driving; and Pandar128, its next-generation mechanical lidar built for automotive volume production. Both new products were released in the second half of 2020.

Hesai said that it delivers its Pandar series of products to clients across over 70 cities in 23 countries worldwide.

Turn to private-sector investors

The Series D round came shortly after Hesai pulled back its attempt for an initial public offering (IPO) on Shanghai’s Nasdaq-style STAR Market in early March. It initially filed an IPO prospectus in January with a target to raise IPO proceeds of 2 billion yuan (nearly $313 million), of which it planned to use 1.2 billion yuan for the construction of a smart manufacturing centre.

The firm shifted from raising money through a public listing to tapping investors in the private market amid emerging signs of Beijing tightening rules around its maturing yet volatile stock markets.

According to Chinese market researcher Qianzhan, a total of 106 companies have voluntarily withdrawn their domestic IPO applications in the first four months of 2021. That means only about 55.3% of companies that had filed for an IPO – withdrawn or not – eventually completed their listings, compared to over 95% for the whole year of 2020.

The firm’s CEO David Li told Reuters this March that Hesai saw its sales increase in 2020 thanks to increasing deals with several self-driving vehicle companies. The startup’s revenue crossed $60 million in 2020, up over 27% from 2019. Its revenue in 2017 was a mere $2.98 million.

Despite its halted IPO plan, Hesai remains a sought-after portfolio firm among China-focused technology investors. A lidar supplier to some of China’s top self-driving startups including Pony.ai, WeRide, and AutoX, Hesai saw its fundraising success ride on the accelerated development of the country’s self-driving industry.

The Chinese government set a goal in November 2020 to have vehicles with partial self-driving technology account for 50% of all new auto sales by 2025, up from its previous goal of 25% set in 2017.

Including the new deal, Hesai has by far raised about $530 million from at least five funding rounds. It secured $173 million in a Series C round co-led by Lightspeed China and Germany-based major auto supplier Robert Bosch in January 2020. Prior to that, the startup raised 250 million yuan in a Series B round led by Lightspeed China and Baidu in May 2018.

It completed a 110-million-yuan Series A round in May 2017, and an angel round in 2015. The firm’s earlier backers also include Beijing-based Pagoda Investment; angel investor ZhenFund; and J Ventures, which is led by the former founding members of Microsoft Ventures in China, among others.

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.