Alibaba, Baidu invest in Chinese smart-driving tech company's near $700 mn IPO
Summary
Alibaba and search-engine giant Baidu are investing in a nearly $700.0 million equity offering by a Chinese smart-driving firm, indicating rising demand for assets in the rapidly growing market for autonomous driving.Alibaba and search-engine giant Baidu are investing in a nearly $700 million equity offering by a Chinese smart-driving firm, indicating rising demand for assets in the rapidly growing market for autonomous driving.
Horizon Robotics, which is planning to raise as much as 5.41 billion Hong Kong dollars through an initial public offering, equivalent to $696.6 million, will begin taking orders from institutional investors starting Wednesday, it said in a filing.
Alibaba, Baidu and state-owned Beijing Financial Holdings are among the cornerstone investors who have agreed to take over 30% of the company’s shares ahead of the IPO. Horizon Robotics is expected to start trading on the Hong Kong exchange on Oct. 24.
Having cornerstone investors helps companies better market their shares to institutional and retail investors.
Chinese companies have been exploring the use of advanced driver-assistance systems in consumer cars and robotaxis as a progression toward full self-driving vehicles. Chinese policymakers are promoting the development of cars, roads, and cloud services to support autonomous driving.
Horizon Robotics provides advanced driver-assistance systems and autonomous-driving solutions that combine algorithms, purpose-built software, and processing hardware for assisted and autonomous driving for passenger vehicles.
The company has set a price range of 3.73 Hong Kong dollars to 3.99 Hong Kong dollars per share. The final IPO price will be determined on Oct. 22.
The offering comes at a time when Chinese equities markets are showing some signs of revival following Beijing’s multibillion-dollar monetary and fiscal push to rejuvenate its ailing economy, which has been battered by weak consumer demand and a real estate slump.
Horizon Robotics said that nearly 70% of the IPO proceeds will be used over five years for research-and-development purposes, while the rest will be used for sales and marketing expenses and meeting working capital needs.
Goldman Sachs, Morgan Stanley and China Securities International are among the banks advising Horizon Robotics on the IPO.
Write to P.R. Venkat at Venkat.PR@wsj.com
