Chinese driverless car startup WeRide is formally preparing for an American public offering more than a year after China began to loosen its effective ban on international initial public offerings.
According to a filing made on Friday with the Securities and Exchange Commission, WeRide registered one billion American Depository Receipts (ADRs) at a maximum price of $0.05, with an estimated $50 million being raised overall.
Offering ADRs is a strong sign that WeRide is prepared for a U.S. IPO, as they reflect shares of a foreign firm sold on U.S. stock exchanges.
According to Bloomberg, which cited people familiar with the situation, WeRide is aiming to raise up to $400 million through its initial public offering (IPO) and private placement. Of that, about $100 million would come from the initial public offering (IPO) and between $200 and $300 million from the placement. If Bloomberg’s sources are accurate, WeRide may be offering additional shares at a later time, or the $50 million in ADSs may represent a portion of the IPO.
WeRide did not provide a comment in a timely manner.
The largest initial public offering (IPO) by a Chinese firm on the American stock market since Geely-owned luxury electric vehicle startup Zeekr started selling shares on the New York Stock Exchange in May will occur if and when WeRide goes public. The shares of Zeekr has dropped 48 percent since launch.
In March 2023, WeRide made its maiden, confidential filing to go public in the United States. Based on statistics from PitchBook, the AV company has raised a total of $1.39 billion at a $5.11 billion value. However, WeRide hasn’t raised a private round since 2022, and venture capitalists are becoming less willing to provide sizable sums of money to autonomous car startups with a protracted path to profitability. WeRide will need to enter the public markets in order to grow and maintain its competitiveness.
The business is authorized to operate independently in Singapore, the United Arab Emirates, and China. It is now conducting tests in San Jose and possesses the necessary permits to test both with and without a driver in California. WeRide is developing a driverless robobus, robovan (for the transportation of products), and robosweeper in addition to a robotaxi service that is open to the public. In addition, the business sells cutting-edge driver assistance systems to original equipment manufacturers.
According to a regulatory filing, WeRide made $20.7 million in revenue in the first half of 2024, which is less than the $25.5 million it made in the same period in 2023. This is based on a $121.3 million loss in the first half of 2024 and a $100.9 million loss in the same period of 2023.
Not all Chinese AV companies are attempting to enter the American market, including WeRide. One of its primary rivals, Pony.ai, is allegedly getting ready for another attempt at a U.S. initial public offering (IPO) after its previous one failed in 2021. With a $12 billion valuation, Pony was planning to go public through a SPAC merger, but it postponed the move because it was having trouble getting Beijing to guarantee it wouldn’t be the target of a crackdown on Chinese companies that went public on overseas markets.