Venture Capital: Chinese EV Startup Xpeng Motors Raises $500M Series C

July 21, 2020 | News, Venture Capital小鹏P7媒体试驾_FZY1695-Xpeng-scaled.jpg

Investors are going all-in for electric vehicles (EVs) as sector hype builds.

Xpeng Motors, the Chinese startup making smart electric vehicles, finalized the expansion of its Series C raise by $500 million, it said Monday. Investors included Asian equity investment firm Aspex Management, US tech hedge fund Coatue Management, global private equity firm Hillhouse Capital, and Sequoia Capital China. The company had announced its Series C funding round of US$400 million in November 2019, in which it onboarded Chinese smartphone maker Xiaomi as an investor. (technode)

“The signing of the Series C+ financing demonstrates investors’ confidence in the Company’s strategy, market positioning, and its long-term vision as a leading Smart EV player in China,” the company said in a statement.

Investors pile into EV startups

Investors appear to have taken a shine to the future of electric vehicles given their increasing driving range and falling running costs, even though subsidies have been slashed. Sales of new-energy vehicles, including electric cars, fell 35% to 85,600 units last month, according to the China Passenger Car Association, as quoted by Bloomberg.

As on date, the roster of investors in Xpeng also includes Alibaba Group (NYSE: BABA) and other prominent institutional investors including IDG Capital, Morningside Venture Capital, GGV Capital, and Primavera Capital.

Xpeng did not disclose the valuation for the latest funding.

“At this stage, Xpeng has not disclosed its current valuation, however, according to our research team, the company is valued significantly higher than the 25 billion yuan it achieved after its Series B+ round in late 2018,” commented Michael Pearson, Head of Corporate Equities at Oak Stone Limited, a Taipei-based financial management company. “Since then, Xpeng has hit two milestones, it launched its second smart electric vehicle, the P7 EV sports sedan, in April this year, and secured a production license for its second manufacturing plant in Zhaoqing, Guangdong Province in May of this year.”

Rivian’s raise

In another example of how smart money is moving into EVs, U.S. EV-maker Rivian announced January 13 its raise of $2.5 billion led by funds and accounts advised by T. Rowe Price Associates, Inc.

Other participating investors included Soros Fund Management LLC, Coatue, Fidelity Management and Research Company, and Baron Capital Group. Existing shareholders Amazon (NASDAQ: AMZN)  and funds managed by BlackRock (NYSE: BLK) also chipped in.

Tesla’s rise

The stock of Elon Musk’s Tesla (NASDAQ: TSLA) has been on a solid upward trajectory in recent months, reflecting investor enthusiasm with the EV maker.

Since July 19, 2019, TSLA is up by $1384.82, or 536.38%.

It’s not surprising, therefore, that investors invested whole-heartedly in Xpeng’s Series C round, also signaling renewed confidence in the Chinese EV sector.

Related Story:  Electric Vehicle Startup Rivian Raises $2.5B

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