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Exclusive | Chinese Tesla challenger Xpeng to file for US IPO seeking USD 500 million [Update]

The startup, valued at USD 400 million last year, submitted the documents to the SEC in secret, according to sources.

Photo: KrAsia Photo: KrAsia

Guangzhou-based electric vehicle (EV) startup Xpeng is set to file documents to the Securities and Exchange Commission (SEC) in secret, on track for its initial public offering (IPO) where it expects to secure USD 500 million from investors, local media outlet 36Kr reported on Monday afternoon, citing sources with knowledge of the matter.

According to the report, Xpeng plans to go public between July and September this year, without specifying which exchange. Underwriters of this IPO include JP Morgan and Goldman Sachs.

An Xpeng spokesman replied to 36Kr‘s request regarding this matter, saying that “We don’t comment on market rumors. We will pay attention to the movements in the capital market closely, in order to seize fundraising opportunities which would benefit our development.”

“The final IPO date has not decided yet,” the 36Kr report wrote, citing sources close to the company’s leadership, adding that, so far, the red-chip structure for the planned off-shore listing has been completed.

Last November, Alibaba-and-Foxconn-backed Xpeng closed its Series C round, raking in USD 400 million from backers including Matrix Partners China, Morningside Venture Capital, and smartphone maker Xiaomi as strategic investors. The post-money valuation reached USD 400 million.

The firm launched its second production model, the P7, in April, in bid to challenge the China-produced Tesla Model 3, KrASIA wrote. The new P7 model will start deliveries by the end of June.

Per industry data provider Automotive Data of China’s stats, in April, the Tesla Model 3 was the best-selling EV in China with 4,312 deliveries, followed by Nio’s ES6 and Lixiang’s ONE with 2,886 and 2,793 vehicles respectively. Xpeng’s G3 ranked fourth with 1,234 deliveries.

Lixiang is also mulling a US IPO, but the startup will weigh the plan after the release of second-quarter earnings, according to the 36Kr report.

The EV pioneer Tesla reported a surprise profit of USD 16 million in the first quarter of 2020, despite factory shutdowns in China and its home market, turning in three consecutive profitable quarters historically. Its stock price sits on USD 857.1 per share as of May 31, 2020.

Investors cited in the 36Kr report think the optimistic performance of Tesla is good news for Chinese EV makers and they’re very likely to go public.

Update June 2: The story has been updated to reflect that Xpeng will file documents to the SEC in secret. A previous version stated that the company had already submitted its application.