Alibaba-backed Xiaopeng Motors, a Chinese electric car startup, announced today the completion of an RMB 4b ($587m) Series B+ funding round. According to the company, this round which was co-led by its chief executive He Xiaopeng, effectively values it at RMB 25b ($3.66 billion). He Xiaopeng has personally invested over $100m, according to an account by our parent 36Kr.
Aside from its CEO, He Xiaopeng, Primavera Capital Group led the round alongside Morningside Venture Capital, as well as Hillhouse Capital Group, Eastern Bell Venture Capital Management, and K11 Investments. Another major backer, the Alibaba Group, purchased a 10 per cent stake in Xiaopeng Motors in end-2017.
Prior to this latest investment, in January 2018 it announced the close of an RMB 2.2b ($348m) Series B round co-led by Alibaba, Foxconn, and IDG Capital. With this Series B+ round, Xiaopeng Motor’s entire Series B round amounted to a total of RMB 6.2b ($910m).
This new influx of fresh funds comes at a time when there is growing interest in China, with many startups channelling billions from Chinese tech majors to funnel substantial capital into advanced technologies for smart mobility and clean energy solutions.
Beijing, which has been supportive of such efforts, has also started to issue special manufacturing permits to encourage non-traditional automotive players to enter the market. Notably, despite trade war tensions, two foreign manufacturers – Tesla Inc. and Germany’s BMW – have managed to bypass the impact of these tensions through the launch of factories in China, according to Bloomberg.
Tesla plans to build its first foreign factory outside the U.S. in China while BMW is poised to emerge as the first foreign manufacturer to own majority control of a Chinese automobile venture.
This acceleration in funding race will boost competition for Chinese electric car unicorns such as Chinese electric vehicle startup NIO – Tencent and Baidu are investors in the firm – as well as Baidu-backed WM Motor Technology.
Given the intense rivalry in this sector both in China & beyond, additional investment in the sector only serves to enhance the foundation for surviving electric car startups.
This view is echoed by He Xiaopeng who commented earlier in an exchange with the SCMP: ”While financing may be vital to the survival and development of internet cars, game-changing factors depend on innovation, rapid execution and product managers with a customer-centric mindset.”
Editor: Shiwen Yap
