Electric vehicle (EV) startup Xpeng has raised an additional $300 million as part of the company’s Series C+, bringing the total amount raised in the round to $800 million.
Why it matters: The deal reflects growing optimism in China’s electric vehicle market after a disappointing second half of 2019. Sales of electric cars plummeted after China’s government cut purchase subsidies by around 50% in mid-2019.
- The industry also took a significant hit in the first quarter of 2020 as a result of the Covid-19 outbreak in China. Just 11,000 new energy vehicles were sold in February, down from 137,000 in December, according to figures from the China Passenger Car Association.
Details: Based in the southern Chinese city of Guangzhou, Xpeng is raising an additional $300 million from new investors including the Qatar Investment Authority, the Middle Eastern nation’s sovereign wealth fund, Reuters reported, citing sources. E-commerce giant Alibaba also contributed to the expanded fundraising, according to CNBC.
- Earlier this month, Xpeng announced its $500 million Series C+, with backing from equity investment firm Aspex Management, US tech hedge fund Coatue Management, global private equity firm Hillhouse Capital, and Sequoia Capital China.
- The company may expand the latest fundraising further, sources told Reuters.
- An Xpeng spokesperson declined to comment on the expanded fundraising when reached by TechNode on Monday afternoon.
- With the addition of the new investors, Xpeng’s Series C is now worth $800 million.
- Xpeng is reportedly also pursuing a US IPO after confidentially filing in June, Chinese media reported.
Context: US EV maker Tesla has boosted investor sentiment in China’s EV sector, as a result of the company’s strong deliveries and an expected surge in profits.
- On July 30, rival EV maker Li Auto went public on the Nasdaq. The company priced at $11.50 prior to its IPO, higher than its expected range of $8 to $10. The company closed up 43% at the end of its first day of trading.
- Xpeng raised $400 million in Series C funding late last year, bringing in new investor Xiaomi.