China’s WM Motor to raise $500m in Series D funding amid clouds over STAR Market IPO

WM Motor's EX6 Plus smart, pure electric SUV. Source: WM Motor website

Chinese electric vehicle (EV) brand WM Motor is close to raising about $500 million in new funding, even as the firm faces a bumpy ride in its efforts to go public on Shanghai’s Nasdaq-style STAR Market.

In a statement on Tuesday, WM Motor said that it expected to secure over $300 million in a Series D1 round jointly led by Hong Kong’s telecom firm PCCW and conglomerate Shun Tak. Other investors, such as the US dollar investment arm of China’s GF Xinde Investment Management, also participated in the deal.

The firm will subsequently close a Series D2 round with investments from a few other international investors, bringing the total fundraising scale to approximately $500 million, it said, without specifying investors of the second tranche.

The proceeds will be used for R&D in self-driving, as well as other smart technologies and products. The fresh capital will also fund WM Motor’s expansion of sales and service channels.

The new financing marks the latest attempt made by Shanghai-based WM Motor to stock up ammunitions by tapping investors in both the private and public markets. It announced in September 2020 the completion of a Series D round at 10 billion yuan (nearly $1.6 billion).

IPO plans

It is also in the process of trying to float shares on the mainland public market. The China Securities Regulatory Commission (CSRC), the country’s securities regulator, in January disclosed that WM Motor had completed the pre-listing tutorial and that it would start reviewing the firm’s application materials for an initial public offering (IPO) on the STAR Market.

The IPO review process typically takes no more than three months, after which the applicant will be given up to one year to complete the listing on a domestic stock exchange given the approval of its IPO registration, according to the CSRC regulations.

If successful, the IPO would make WM Motor China’s first EV company to go public on the STAR Market. But the firm reportedly postponed its IPO plan due to the regulator’s concerns over its technological capabilities, insufficient R&D input, and continuous loss-making status, according to several domestic media reports in April, citing sources with knowledge of the matter. WM Motor later disputed such claims and said its IPO was well on track.

Founded in 2015, WM Motor produces EVs in eastern China’s Wenzhou city, Zhejiang province, in a facility equipped with mass customisation capabilities and a capacity of delivering 100,000 units per year. It has another facility in Huanggang city, in central China’s Hubei province.

Despite being one of China’s best-funded EV makers, WM Motor has yet to turn a profit. It booked a net loss of over 3.6 billion yuan ($558.4 million) in the first nine months of 2020, as its revenue was close to 1.7 billion yuan ($263.7 million) during the period.

Its latest official data boosted the sales of 5,005 units in September, up 115.8% year-on-year. For the first nine months of this year, its total sales amounted to 29,043 units, which already surpassed the 22,495 units recorded for the whole year of 2020.

WM Motor is one of the EV companies riding on the Chinese government’s pledge to boost its EV car sales to 25% of the country’s total car sales by 2025. However, the competition in the sector is also growing fiercer, with tech giants like Xiaomi joining the race with the official registration of its EV unit last month.

WM Motor’s sales volume also fell short of publicly-traded domestic competitors NIO, Li Auto, and Xpeng, which booked sales of 66,395 units, 55,270 units, and 56,404 units in the first nine months of this year, respectively.

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.