Published on November 29th, 2017 | by James Ayre0
NIO Capital To Raise $500 Million For Investment To Help China’s Auto Industry
November 29th, 2017 by James Ayre
NIO Capital, the investment fund established by the China-based electric vehicle manufacturer NIO, is now working with various prospective investors to create a $500 million fund to complement its first yuan fund, which it’s now in the process of completing, according to unnamed sources quoted by Reuters.
The idea, reportedly, is for the new dollar fund to help fund both China-based firms relying on overseas structures (variable-interest entities, etc.) and also foreign startups in the converging tech and auto sectors.
Images of NIO EVE concept EV
The yuan-based fund will, conversely, focus on China-based firms — with its 10 billion yuan ($1.52 billion) worth of working capital to be used to fund relevant startups and firms. That fund is expected to be completed within the next 2 years.
“NIO Capital was co-founded last year with Sequoia Capital and Hillhouse Capital,” Reuters reports. “NIO itself is backed by Asian tech behemoth Tencent Holdings and is due to release its first mass production car — the ES8 pure-electric, 7-seat sport-utility vehicle, next month. It has also vowed to bring an autonomous electric car to the US market by 2020.” (Note: Tencent is also a major (5%) shareholder of Tesla since March.)
“In an interview separate to the dollar fundraising plans, Ian Zhu, a partner at NIO Capital, said the firm’s aim was to capture several trends changing the auto and energy industries. It was primarily investing in sectors ranging from electric vehicles and battery technologies to new energy and materials, he added.”
Interest in self-driving vehicle tech firms is also present, of course — with NIO Capital having already invested some 2 billion to 3 billion yuan (~$300 million to $455 million) into 15 startups, of which a number are focused on self-driving tech (Momenta comes to mind).
According to the NIO Capital partner, self-driving vehicle related business is going to represent around 20% of the total global auto sector within just the next 5 to 10 years. Other analysts and observers have made similar predictions in recent times.