Chinese Startup NIO Is Said to Consider U.S. Listing Next Year

(Bloomberg) -- Chinese electric-car startup NIO is considering an initial public offering in the U.S. as soon as next year as it seeks funds to invest in areas including self-driving technology, according to people with knowledge of the matter.

The company is also weighing a sale of a stake in its U.S. business for $300 million to $400 million, which would value those operations at more than $1 billion, a person familiar with the plan said. NIO hasn’t made a final decision on an IPO or stake sale, and details could change, said the people, who asked not to be identified because the information is private.

The startup has been seeking capital to help fund the development of new electric-vehicle technologies. Earlier this year it raised more than $1 billion from investors including Tencent Holdings Ltd., people familiar with the matter said last month. NIO is among tech firms that have sprouted throughout China over the past few years as policy makers in the world’s biggest auto market promote battery-powered vehicles amid a push to curb pollution.

Representatives for NIO declined to comment.

NIO, formerly known as NextEV, is nearing a sale of as much as 30 percent of the U.S. business, said the person familiar with the plans. The business is led by former Cisco Systems Inc. Chief Technology Officer Padmasree Warrior, who joined the company in 2015.

While the Chinese parent is making electric vehicles to compete with the likes of Tesla Inc., the San Jose, California-based subsidiary focuses on developing the technology needed for self-driving cars. NIO also aims to sell those autonomous systems to other carmakers, and management was concerned that customers in the U.S. and Europe would be less likely to buy the technology from a Chinese company, according to one of the people.

A sale of a stake in the U.S. technology unit at the expected valuation would put it in a select group of self-driving car companies that are at least $1 billion, including Zoox Inc., the stealth company backed by Draper Fisher Jurvetson and Lux Capital. Sensor-makers Quanergy Systems Inc. and Velodyne Lidar Inc. also achieved so-called unicorn valuations in their most recent fundraising rounds.

NIO, set up in 2014 by founder William Li and a group of internet entrepreneurs, is about to start sales of its first model on Dec 16.

To contact Bloomberg News staff for this story: Alex Webb in San Francisco at awebb25@bloomberg.net, Tian Ying in Beijing at ytian@bloomberg.net, Vinicy Chan in Hong Kong at vchan91@bloomberg.net, Crystal Tse in Hong Kong at ctse44@bloomberg.net, Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net.

©2017 Bloomberg L.P.

With assistance from Alex Webb, Tian Ying, Vinicy Chan, Crystal Tse, Lulu Yilun Chen