China’s WeRide targets $5bn U.S. IPO amid regulatory challenges

Chinese autonomous driving startup WeRide has announced its plans to raise up to $5.02 billion in a U.S. initial public offering (IPO). The Guangzhou-based company, known for its self-driving taxis, vans, buses, and street sweepers, aims to offer 6.45 million American depositary shares (ADS) at a price range of $15.50 to $18.50 per share, potentially securing $119.4 million in funding.

In addition to the IPO, WeRide has secured commitments for a private placement worth $320.5 million. Notable investors in this round include Alliance Ventures BV, the venture capital arm of the Renault-Nissan-Mitsubishi Alliance, and JSC International Investment Fund SPC. German automotive giant Robert Bosch GmbH has also expressed interest in purchasing up to $100 million worth of shares in the IPO.

Founded in 2017, WeRide has been at the forefront of autonomous driving technology in China, conducting tests and commercial pilots in 30 cities across seven countries. Despite the company’s ambitious plans, the U.S. regulatory environment presents challenges. The Biden administration is expected to propose restrictions on Chinese software in autonomous vehicles, which could impact WeRide’s operations in the U.S.

WeRide’s financials reflect the challenges faced by companies in the nascent autonomous driving sector. For the first half of 2024, the company reported a net loss of 881.7 million Chinese yuan ($123.04 million), an increase from the 723.1 million yuan loss recorded during the same period last year. Revenue also dipped to 150.3 million yuan, down from 182.9 million yuan a year earlier.

This move makes WeRide the second major Chinese company to seek a U.S. listing in 2024, following electric vehicle maker Zeekr’s debut on the New York Stock Exchange in May. Zeekr’s shares, however, have since dropped 35.6% below their offer price, highlighting the volatile environment for Chinese IPOs in the U.S.

WeRide’s IPO comes amid a broader backdrop of caution regarding Chinese firms listing in the U.S., following the delisting of ride-hailing giant Didi Global in 2022 due to regulatory pressures from Chinese authorities. As WeRide steps onto the global stage, the company’s future will depend on navigating both technological challenges and a complex geopolitical landscape.

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