FTXT Energy Technology, a Chinese developer of hydrogen fuel cell technology, has closed 555 million yuan ($78.6 million) in a Series B round of financing as its parent group raises its stakes in the country’s eco-friendly vehicle market.
Shanghai-headquartered FTXT, an affiliate of China’s Great Wall Motor, raised the new capital from lead investor CNBM New Materials Fund, a 20-billion-yuan ($2.8 billion) new material-dedicated industry fund backed by China National Building Material (CNBM), the startup announced on Wednesday. CNBM is the biggest cement and gypsum board producer in China.
China’s state-backed private equity firm SDIC Fund Management, which had co-led FTXT’s Series A round in 2021, continued to back the new investment. Hydrogen energy producer Liben Energy participated, with UBS Securities’ China joint venture serving as the financial adviser of the deal.
The startup did not disclose its latest valuation with the completion of the Series B round. Its valuation crossed 4 billion yuan ($565.8 billion) in December 2021, when it raised 900 million yuan ($127.2 million) in the Series A round jointly led by SDIC Fund Management and PICC Capital, the alternative investment platform of Chinese listed insurer PICC Group.
FTXT – which focuses on the R&D, production, and sales of hydrogen fuel cells – will use the net proceeds to speed up the development and iterations of its new technologies and products. The startup aims to build a global R&D system and attract high-end professionals to help it step up its manufacturing capabilities.
The startup was started in April 2019 with 450 million yuan ($63.6 million) in registered capital from Great Wall Motor, a traditional carmaker in China with a history dating back to the 1980s. Its range of auto-grade hydrogen fuel products includes fuel cell engines, fuel cell stacks, and hydrogen storage systems. It has a global team across countries such as China, Canada, Germany, and Japan.
FTXT represents “a key force” in promoting Great Wall Motor’s efforts in expanding its sub-brand portfolio and leading China’s new energy vehicle (NEV) development, vice-president Xie Chaopeng said in a statement.
Traditional carmakers in China have been in a race to build and expand new eco-friendly business lines in the face of intensified competition for a larger stake in China’s burgeoning NEV market. Before the establishment of FTXT, Great Wall Motor in early 2018 spun out its power battery department and created SVOLT Energy Technology, an electric vehicle (EV) battery producer.
The business that started with an initial investment of 1 billion yuan ($141.1 million) from the parent has grown into one of China’s top EV battery suppliers with shareholders including smartphone brand Xiaomi Corp and IDG Capital. Earlier this month, SVOLT filed for an initial public offering (IPO) to raise as much as 15 billion yuan ($2.1 billion) on Shanghai’s Nasdaq-style STAR Market.