Xiaomi-backed Chinese EV battery maker SVOLT files for $2.1b STAR Market IPO

Xiaomi-backed Chinese EV battery maker SVOLT files for $2.1b STAR Market IPO

Tobias Hans, Minister President of Saarland, Germany said in a press conference on November 17, 2020 that SVOLT Energy Technology plans to build two battery production factories, at a combined cost of about 2 billion euros ($2.4 billion), in Saarland. Source: SVOLT Energy Technology

SVOLT Energy Technology Co Ltd, a Chinese electric vehicle (EV) battery maker that counts Xiaomi Corp and IDG Capital among its investors, has filed for an initial public offering (IPO) to raise as much as 15 billion yuan ($2.1 billion) on Shanghai’s Nasdaq-style STAR Market.

SVOLT, a spinoff from Chinese automaker Great Wall Motors, filed its prospectus on Friday with a plan to offer about 1.1 billion shares, or 1.2 billion if it exercises an overallotment option, through the domestic public listing. Chinese investment bank CITIC Securities served as the lead underwriter of the deal.

The Chinese company is moving toward the IPO after it has garnered a few tens of billions of Chinese yuan in the private market. In 2021 alone, SVOLT completed three big-ticket investments including a 6 billion yuan ($838 million) Series B+ round in December. Earlier the same year, it closed a Series B round at 10.28 billion yuan ($1.4 billion) in August and a Series A round at 3.5 billion yuan ($488.8 million) in February.

SVOLT’s attraction to the public market is yet to be seen, although it has been a darling of private-market investors since its spinoff from Great Wall Motors as an independently operated company in 2018.

Its group of venture investors includes both privately run investment companies like asset manager CDH Investments and smartphone brand Xiaomi Corp, as well as Chinese state-owned corporates such as the investment arms of telecom company China Mobile and insurance firm PICC Group. China’s Advanced Manufacturing Industry Investment Fund, which currently manages 70 billion yuan ($9.8 billion) across two vehicles, is also an investor in SVOLT.

The company became a unicorn in April 2020 after securing 1 billion yuan ($139.7 million) in a strategic investment from CMG-SDIC Fund Management.

Private investors made big bets on SVOLT before it generates a profit. The company posted a loss of over 897.4 million yuan ($125.3 million) in the first six months of 2022, against revenue of 3.7 billion yuan ($516.8 million) during the same period, according to the firm’s prospectus.

On the positive side, the firm’s annual revenues have multiplied in recent years to nearly 1.2 billion yuan ($167.6 million) in 2021, compared to 701 million yuan in 2020 and 325.6 million yuan in 2019, the prospectus shows.

With a history dating back to 2012, SVOLT focuses on the R&D, production, and sales of lithium-ion batteries and energy storage solutions primarily for EVs and new energy vehicles (NEVs).

Its current client base is largely composed of domestic carmakers including Great Wall Motors, Geely Auto, Leapmotor, Xpeng, Li Auto, as well as Dongfeng Motor and its EV arm Voyah, which recently notched 4.55 billion yuan ($635.4 million) in its Series A round.

Outside of China, it partners with Stellantis, a car manufacturing joint venture between the Italian-American conglomerate Fiat Chrysler Automobiles and the French PSA Group.

The bulk of the IPO proceeds will help SVOLT fund the construction of its manufacturing and R&D facilities in China.

Headquartered in eastern China’s Changzhou City, Jiangsu Province, the company is building a nationwide network to produce EV batteries. It also runs R&D centres in countries like Germany and South Korea.

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