According to two sources familiar with the matter, Zeekr, the luxury electric vehicle (EV) brand owned by Chinese automaker Geely (0175. HK), has resumed its efforts to raise $500 million through an initial public offering (IPO) in New York. The company had temporarily halted its listing plans in November due to a misalignment in valuation expectations between investors and the company, compounded by unstable global financial market conditions at the time.
Geely has already raised funds in a private sale of shares in the Zeekr EV, in which it invested about $1 billion. The company plans to use the proceeds from a potential IPO to help finance the development of its battery-electric vehicles, which are expensive to produce. The company also wants to expand its retail networks and strengthen its technology platform.
The Zeekr 001 is sold in China through a subscription model, and the brand hopes to launch its cars in Europe next year as more Chinese companies venture beyond their domestic markets. According to data monitored by Reuters, sales of the 001 jumped to 92,105 in the first nine months of this year, almost double from last year.
However, the company may not meet its hoped-for target of raising more than $500 million from a U.S. float because of the weaker U.S. IPO market for Chinese firms in the first quarter of 2024 compared to last year. In addition, Beijing has tightened its grip on overseas share sales of companies that trade in the United States, including ride-hailing firm Didi Global.
Despite the sluggish market, Zeekr believes it can reach a higher valuation in New York than in Hong Kong, where it is currently listed. The company has resumed a non-deal roadshow with investors. According to one of the sources, it has made a public filing to the Securities and Exchange Commission, or SEC, to proceed with preparatory work for its IPO. The other source said that Zeekr is planning a debut in the second half of this year when it expects investor demand to improve.
