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5 March 2018

Analysis: Nio speeding up to a $2bn IPO

Smart vehicle producer Nio, previously backed by Tencent, Baidu, JD.com and Lenovo, has announced its intensions to go public and raise between $1bn and $2bn.

Author: Kaloyan Andonov, reporter, GCV Analytics

China-based smart electric vehicle developer Nio has hired eight banks as underwriters for an initial public offering (IPO): Goldman Sachs, Bank of America Merrill Lynch, Credit Suisse, Morgan Stanley, Citigroup, Deutsche Bank, JPMorgan and UBS. The flotation will enable various China-based corporate backers to exit it. The company hopes to raise between $1bn and $2bn in the transaction which is expected to take place in the US during the second half of 2018.  

Founded as NextEV in 2014, Nio develops an electric autonomous sports car equipped with a personalised digital assistant that it aims to bring to market by 2020. The sports utility vehicle is to be equipped with an electric drivetrain, autonomous driving system and an in-car artificial intelligence system to control its functioning. Nio already developed a supercar dubbed the EP9 which has proven to be the fastest electrically-powered vehicle in the world.

Nio had raised substantial amounts of funding in corporate-backed rounds as the GCV Analytics chart shows. The latest round it raised was a $1bn one in November 2017, led by internet group Tencent at a valuation of about $5bn. Earlier, in March 2017, Tencent and fellow internet company Baidu co-led an $87m round, which also featured consumer electronics maker Lenovo and valued Nio at $2.9bn. In 2015, Tencent had joined e-commerce firm JD.com to invest an undisclosed sum before participating in a $500m round later the same year.

When it takes place, the IPO would be the notable exit for China-based corporates in the automotive space. China-based corporate venturers have demonstrated considerable interest in the autotech space, as the historical bar chart here suggests. These developments been in line with the rising corporate interest globally in this disruption-ripe space.

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