Wenyuan Zhixing received US$400 million in financing and a post-investment valuation of US$4.4 billion

Wen 丨 Ma Hui

Edited by Cheng Manqi

After Xiaoma Zhixing announced the completion of the D round of financing at the beginning of this month, with a valuation of $8.5 billion, "LatePost" exclusively learned that Wenyuan Zhixing, an autonomous driving company that also takes the L4 technology route, has also recently completed a new round of financing of more than $400 million, with a post-investment valuation of $4.4 billion.

Investors in this round include GAC Group, Bosch, Sino-Arab Industrial Investment Fund and Carlyle Investment Group. Except for GAC Group, the remaining investors are new shareholders of Wenyuan Zhixing.

"LatePost" also learned that the Sino-Arab Industrial Investment Fund also participated in the Series D financing just announced by Xiaoma Zhixing, and other investors included Mubadala Development Company and The China Development Bank. Xiaoma Zhixing said that the disclosed financing is the first delivery of the D round, and the D round has not yet been fully completed.

The valuations of Xiaoma Zhixing and Wenyuan Zhixing are currently among the top two domestic Robotaxi (unmanned taxi) autonomous driving companies.

Both companies have accelerated their fundraising pace since 2020, and since then, they have each raised more than $1 billion, reflecting the enthusiasm of the capital markets for the sector in the previous phase.

But now, the financing environment for such companies is getting colder.

An investment banker told LatePost that it can still complete large transactions in the current market, possibly because investors "made decisions last year." He found that this year's investment institutions are "pessimistic about automatic driving", and some investors have clearly stated that they will not sell autonomous driving companies this year when they do not see the exit path. This area is more suitable for the layout of long-term funds.

One investor said the market is now divided.

As more car companies begin to adopt L2 (assisted driving) mass production solutions, and mobileye, a star company in this field, has launched a listing, lidar companies serving L2 systems and ADAS (assisted driving systems) solution providers have good market feedback. "Some second-tier projects can also be successfully financed, and the financing of head companies is hot." The investor said.

L4, on the other hand, has entered a relative trough, arguing that the company "can't expect valuations to go up without a ceiling, there's always more money to make you burn without scruples," not just telling stories, or achieving clearly visible product and business progress. Pony is currently valued at $8.5 billion, down from its target valuation of $12 billion when it sought to go public last year.

Changes in the external environment have led to the cautious attitude of investors today.

Sino-US technology competition has shown substantial impact on autonomous driving companies that have a layout in both countries.

High-level autonomous driving and unmanned driving involve high-precision maps and traffic data, and are regarded by countries as related to a country's technological competitiveness and national security.

"LatePost" learned that Tucson, a self-driving heavy-duty truck company that went public in the United States last year, has decided to spin off its Sino-US business. The Chinese team will then operate independently and the management will remain unchanged, and continue to achieve unmanned logistics on the highway. Previous media reports that Tucson would sell its Chinese operations were inaccurate.

Self-driving companies with Chinese backgrounds, such as Xiaoma Zhixing, Wenyuan Zhixing, AutoX, Baidu Apollo, and Didi Autonomous Driving, also have R&D teams and test vehicles in the United States.

According to the California Motor Vehicle Administration, as of the end of last year, Wenyuan Zhixing had 14 test vehicles in California, 38 xiaoma zhixing and 44 AutoX.

A person close to Pony Chi Heng once told Late Post that the AMERICAN R&D team of Pony Chi Heng will undertake more complex R&D projects and solve some medium- and long-term problems.

The U.S. government does not want the self-driving technology developed in the United States to flow to other countries. U.S. teams at these companies could also be affected in the future.

The macro financial environment is also changing.

The Fed has initiated interest rate hikes and liquidity has tightened. In the short term, technology companies with low revenue, huge losses and high risks are the first to be affected.

Shares of self-driving companies Tucson Future and Aurora, which have made a presence in the secondary market, have fallen sharply since the end of last year. Compared with the listing, Tucson's total market capitalization has now fallen by 2/3, less than $3 billion, and Aurora's market capitalization has fallen by 1/2, less than $6 billion.

Since the second half of last year, both Xiaoma Zhixing and zhijia Technology, an autonomous driving heavy-duty truck company, have failed to land on the US stock market as planned. This also makes the capital exit of similar companies face more uncertainty.

Companies that were originally targeting the Robotaxi market are continuing to push ahead with this goal. The industry consensus is that commercialization is not so fast.

The key points in the current commercialization of Robotaxi are to pay for operating permits and remove safety officers – otherwise the operating cost per kilometer would be difficult to reduce to that of a regular taxi.

Robotaxi already operates in Beijing and Guangzhou for a fee in specific regions. Wenyuan Zhixing, Baidu Apollo and Xiaoma Zhixing are already charging passengers on Robotaxi.

China has yet to introduce a policy to allow the removal of safety officers from passenger vehicles.

Companies are also doing new business.

Specific actions include entering new scenarios, such as "unmanned minibuses" driving on urban bus capillaries; autonomous trucks serving same-city freight; and autonomous heavy trucks serving intercity trunk logistics.

Pony Zhixing released an autonomous driving heavy truck last year;

Yuanrong Qihang laid out the same-city freight after receiving investment from Alibaba last year;

Since 2020, Wenyuan Zhixing has successively laid out unmanned minibuses and same-city freight, and its unmanned minibuses have been tested in Guangzhou, Nanjing and Zhengzhou for one year, and began to operate in Guangzhou this year;

Baidu Apollo accesses partners in the form of a platform to support heavy trucks, unmanned minibuses and unmanned delivery trolleys at the end.

The new exploration also includes building their own cars while controlling software and hardware, which is more of a choice for large companies with strong financial strength and strong financing capabilities, such as Baidu and Didi, which are already building cars.

Last year, Xiaoma Zhixing recruited car-building background personnel such as the former design director of Xiaopeng Motors, but has not announced the relevant progress since then.

According to "LatePost", AutoX founder Xiao Jianxiong also personally invested in a car company, Elix, last year. The company's core personnel include Guo Yansong, former deputy director of Great Wall Motor Technology Center, Liu Xinwei, former director of Great Wall Motor Technology Center, Ning Shuyong, former vice president of Great Wall Motor, and Weng Haoyu, former chief engineer of Xiaopeng Automobile's former three-electric system, who also has worked at Great Wall Motors before. Business information shows that Xiao Jianxiong holds 90% of the shares in Elix.

These new directions also require continuous capital investment, new capabilities for companies, and business relationships with new types of customers such as logistics companies. This tests the ability of comprehensive management and operation beyond R&D.

As the head company, the pressure of Wenyuan Zhixing and Xiaoma Zhixing is that the valuation is already high and needs to show more business progress to attract new financing; the advantage is that when the winter of capital arrives, they have more money in their hands.

Including the latest round of financing, Wenyuan Zhixing, founded in 2017, has completed 10 rounds of financing, totaling about US$1.2 billion, and investors include Hongtai Fund, Qiming Venture Capital, IDG Capital, Yutong Bus, GUANGZHOU Automobile Group, Leiluo-Nissan-Mitsubishi Alliance, etc.