Chinese autonomous vehicle company WeRide is gearing up for a public debut on the US stock market. This comes over a year after China relaxed its restrictions on foreign initial public offerings (IPOs). The company is aiming for a valuation of up to $5.02 billion in its IPO.
IPO Details and Investor Interest
WeRide expects to raise between $96 million and $119.4 million through the IPO, depending on the final share price. The company will offer 6.45 million American Depository Shares (ADS) at a price range of $15.50 to $18.50 per share. Additionally, significant investor commitments exist for a concurrent private placement of $320.5 million. These investors include Alliance Ventures (Renault Nissan Mitsubishi Alliance), JSC International Investment Fund, Get Ride, and Beijing Minghong.
Competitive Landscape and Market Entry
If successful, WeRide’s IPO would become the largest by a Chinese company on the US market since the May 2024 debut of Geely-owned electric vehicle startup Zeekr. However, it’s worth noting that Zeekr’s stock has fallen significantly since its IPO. This highlights the current investor climate towards autonomous vehicle companies, where profitability remains a distant prospect. WeRide, like its competitor Pony.ai reportedly planning a US IPO attempt, faces the challenge of justifying its valuation in a competitive market with long road to profitability.
Company Operations and Growth Plans
WeRide currently holds permits for autonomous vehicle operation in China, the UAE, and Singapore. Additionally, the company possesses testing permits with and without drivers in California. They are actively testing autonomous vehicles in San Jose and exploring various applications beyond robotaxis, including driverless buses, delivery vans, and sweeping robots. Furthermore, WeRide offers advanced driver-assistance systems (ADAS) with plans to sell them to original equipment manufacturers (OEMs).
WeRide’s financial performance shows declining revenue ($20.7 million in H1 2024 compared to $25.5 million in H1 2023) with ongoing losses ($121.3 million in H1 2024). The company plans to utilize the IPO proceeds for research and development (35%), commercialization and marketing for expansion (30%), capital expenditures for test vehicles (25%), and general corporate purposes (10%).
Looking Ahead
WeRide’s US IPO attempt reflects the company’s need for capital to stay competitive and achieve further growth. The industry’s overall financial performance and recent stock market trends suggest a cautious investor landscape for autonomous vehicle companies. WeRide’s success in the IPO will depend on its ability to demonstrate a clear path towards profitability and address investor concerns.
Source: Techcrunch
