Exclusive-luxury Geely’s electric vehicle brand Zeekr seeks over $1 billion in an IPO in the United States, according to sources.
According to three people with direct knowledge of the situation, Zeekr, the upscale electric car brand of Chinese automaker Geely, has filed confidentially for a U.S. initial public offering in an effort to raise more than $1 billion.
Zeekr is seeking a valuation of more than $10 billion, according to two people, in what would be the first large Chinese IPO in the United States in more than a year and a half.
This contrasts to a valuation of approximately $9 billion in the company’s first external financing round last year.
The brand, which competes with Tesla (NASDAQ:TSLA) Inc. and Chinese rival Nio (NYSE:NIO) Inc., aims to offer its first and only model, the 001 crossover, in Europe in 2019. In doing so, it joins a rising number of Chinese automakers seeking to introduce or boost sales of electric vehicles in the region.
Last week, Zeekr filed with U.S. regulators and plans to go public in New York as early as the second quarter of 2023, according to two people and a fourth source with firsthand knowledge of the subject.
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Since the material had not yet been made public, the sources declined to be named.
According to two of the sources, Zeekr also considered Hong Kong as a site for its IPO but ultimately chose New York in an effort to achieve a greater valuation.
Geely, who handles Zeekr’s public relations, declined to comment. It announced in October that it would spin out Zeekr but did not specify a listing venue or the expected offering price.
Geely, now known as Zhejiang Geely Holding Group, founded Zeekr in April 2021 to capitalise on the rising demand for premium electric vehicles in China. Zeekr released the 001 crossover in China later that year.
A successful IPO would be the first significant U.S. float of a Chinese company since Beijing tightened its grip on Chinese companies’ overseas share sales in July of last year—a decision precipitated by a cybersecurity investigation into Didi Global following its U.S. stock market debut.
A Zeekr offering might pave the way for more Chinese share sales in the United States, which has the largest capital pool in the world and a more predictable listing pace.
This year, just five Chinese companies have made U.S. initial public offerings, raising a total of $162.5 million, with the largest being hotel company Atour Lifestyle Holdings’ November sale of $52.25 million.
This is significantly less than the $12.8 billion raised last year.
Investors such as Intel (NASDAQ:INTC) Capital, battery manufacturer CATL, and online video company Bilibili (NASDAQ:BIBLI) Inc. contributed $500 million to Zeekr’s first external investment round in August 2017.
According to the China Passenger Car Association, it sold a little over 60,600 vehicles in the first nine months of 2022, compared to around 285,900 Model Y crossovers for Tesla in China over the same period.
The 001 model starts at 299,000 yuan in China, somewhat higher than the recently reduced price of 288,000 yuan for Tesla’s Model Y. Zeekr has not yet disclosed pricing for international markets.
