Zeekr is seeking an $18 billion valuation in a planned US IPO, though investors believe that's higher than they expected, according to local media.
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Geely Holding Group's premium electric vehicle (EV) subsidiary, Zeekr, is seeking an $18 billion valuation in a planned US initial public offering (IPO), which is higher than investors had expected, a report in local media Jiemian said today.
Zeekr has yet to talk to investors in the Chinese mainland and Hong Kong, with a focus on overseas investors, the report said, adding that as of early September, the company had communicated with a number of institutional investors in Singapore and Europe.
From initial talks, Zeekr is looking for a valuation of $18 billion, which is about the same as Nio's current market capitalization of $18.3 billion, the report said.
The valuation is higher than expected, Jiemian said, citing several investors. For reference, Xpeng (NYSE: XPEV), which received an investment from Volkswagen, had a recent market capitalization of $15.8 billion, the report said.
Given that it's still in the early stages of communication, Zeekr's offer to investors will have room for downward adjustment, the report said.
Zeekr was officially launched as a standalone company in March 2021, and the models currently on sale include the Zeekr 001, Zeekr 009, and the Zeekr X.
On December 13, 2022, Geely said in a Hong Kong Stock Exchange announcement that Zeekr filed a draft registration statement for a possible IPO with the US Securities and Exchange Commission on December 7 on a confidential basis.
On February 13 of this year, Geely Holding said Zeekr received a total of $750 million in Series A funding from five investors.
Upon closing the investment, Zeekr will be valued at $13 billion, Geely Holding's press release at the time said.
Zeekr aims to reach annual sales of 650,000 units by 2025 and be among the top three in the world in terms of market share in the premium EV market, the release said.
On August 23, local media outlet Cailian reported that Zeekr plans to begin a new round of communications with investors in late August and plans to raise around $1 billion in its planned IPO.
Zeekr's IPO is expected to be valued at well over $13 billion, Cailian's report said.
It would be more difficult for Zeekr to get a valuation comparable to Nio, Xpeng or Li Auto at this point, as the US stock market environment and investor fervor for EV changes has cooled, Jiemian said today.
The extent to which the company will have exclusive access to Geely's Sustainable Experience Architecture (SEA) structure, and how much support it will receive from strategic investor CATL, will affect Zeekr's valuation, the report said, citing Gui Lingfeng, a director at consulting firm Kearney.
If Zeekr delays its IPO by one to two years, the likelihood of it receiving a larger funding amount and valuation will also be higher, Jiemian noted.
However, that no longer seems feasible, and Zeekr is continuing to push for its planned US listing.
Zeekr filed an overseas listing filing with the China Securities Regulatory Commission (CSRC) and plans to issue up to 926,074,300 shares of its ordinaries and list it on the New York Stock Exchange, according to an announcement on the CSRC's website on August 25.
Zeekr should update the filing if it does not complete the foreign listing within 12 months if it plans to move forward at that time, according to the announcement.
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