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China Approves US Listing for Self-Driving Firm in Easing Sign

In Technology
April 24, 2024

(Bloomberg) — China has greenlit a US listing by autonomous driving startup Pony.ai, raising the potential for an increase in Chinese tech initial public offerings in New York after a more than two-year hiatus.

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Pony.ai plans to sell up to 98 million shares and list on the Nasdaq or the New York Stock Exchange, according to an announcement on the China Securities Regulatory Commission’s website published late Tuesday.

The Chinese securities regulator said Friday it would support overseas listings of tech firms. Chinese IPOs in the US slowed dramatically after Beijing cracked down on listings and the tech industry in 2021 following controversy over a US share sale by Didi Global Inc.

Founded in 2016, Pony.ai develops and operates self-driving fleets in the US and China, with its main hub in Fremont, California. It launched autonomous robotaxis in Guangzhou in 2018 and rolled out the service in Irvine, California a year later.

The firm is backed by Toyota Motor Corp., which invested $400 million in 2020, as well as Saudi Arabia’s Neom Co. The company is valued at $8.5 billion, based on its last funding round, Caixin reported in October.

US markets have long held vital importance for Chinese firms, which began selling American depositary receipts — surrogate securities that allow investors to hold overseas shares — in 1993. Since then, Chinese companies have raised more than $100 billion on US exchanges, including most of the country’s technology industry.

That flood turned into a trickle after Didi pushed ahead with a $4.4 billion US IPO in June 2021 against Beijing’s wishes, incurring the wrath of authorities. The firm was later forced to delist and fined more than 8 billion yuan ($1.1 billion) by Chinese regulators, which imposed new scrutiny on future applicants.

Since the start of 2022, only one Chinese IPO in the US has exceeded $100 million — Hesai Group, a developer of sensor technologies used in self-driving cars. That’s a far cry from 2021, when a dozen companies each raised more than double that figure, according to data compiled by Bloomberg.

Pony.ai was considering selling shares in the US in 2021 before putting the plan on hold, Bloomberg News previously reported.

–With assistance from Edwin Chan.

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