This is not the first time Xiaomi has invested in a NIO-backed company.
In the same way that NIO is expanding its presence in the electric vehicle (EV) industry through investments, Xiaomi, which announced its entry into the car-making industry only last year, is also continuing to make such moves.
NIO Capital, the venture capital arm of NIO, announced Wednesday that Zhejiang EVTECH, an EV parts supplier in its portfolio, closed a strategic round of financing in the hundreds of millions of yuan.
The round comes from Hubei Xiaomi Changjiang Industrial Investment Fund Management, a fund of more than RMB 10 billion launched by Changjiang Industrial Fund and Xiaomi in December 2017.
The latest financing will be used for Zhejiang EVTECH's new platform development and expansion in overseas markets.
Previously, Zhejiang EVTECH closed a Series D round of more than RMB 100 million invested by China AIG, China Resources Microelectronics, and Zhejiang Hongda Warp Knit, NIO Capital said, adding that the latest two rounds of financing allow Zhejiang EVTECH to raise a combined total of approximately RMB 300 million in funding.
Founded in August 2011, Zhejiang EVTECH focuses on technology development and manufacturing of high-voltage core component products for NEVs, and is a major supplier of on-board chargers and on-board DC/DC converters for NEVs in China.
NIO Capital invested in Zhejiang EVTECH in 2017, and the latter's products are used in NIO's ES and ET series products, as well as products under GAC Aion and Great Wall Motor's Ora brand.
(Screenshot of Zhejiang EVTECH website)
The latest valuation of Zhejiang EVTECH is unknown, though one of its shareholders, Hunan Changgao High Voltage Switchgear Group, transferred its 1.8 percent stake for RMB 45 million last November, implying a valuation of RMB 2.5 billion at the time.
Xiaomi officially announced in March 2021 that it was joining the car-making bandwagon and started to increase its investment in companies in the industry chain in this sector.
This is not the first time the smartphone giant has invested in an NIO-backed company.
In August 2021, Alpark, an NIO-backed smart parking platform, announced it had received a strategic investment from Xiaomi.
The company said the investment would help advance its business synergies with Xiaomi's smart ecosystem and multiple scenarios. The amount of the investment was not disclosed.
Last November, tech media outlet 36kr reported that NIO's supplier of 150-kWh semi-solid-state batteries was Beijing WeLion New Energy Technology, which will receive an investment of about RMB 500 million from Xiaomi and Huawei, valued at RMB 5 billion.
Huawei, Xiaomi and Shunwei Capital have signed off on the investment in August 2021, according to the report.