NIO Capital, the investment arm of Chinese electric vehicle startup Nio Inc, has closed its debut USD-denominated fund at over $200 million to support early and middle-stage companies in the automobile, energy and logistics fields.
The new fund, dubbed “Eve ONE L.P.,” attracted capital injections from sovereign wealth funds, funds of funds (FOFs), multinational groups, family offices, overseas pension funds and insurance institutions, according to a recent company statement.
Eve ONE L.P. reached the first closing in 2018, shows the company website. NIO Capital did not disclose more detailed information about its limited partners.
The first USD fund shows that investors “remain bullish” about China’s long-term development, economic growth, and its potential of structural transformation in a global capital market filled with uncertainties, said Ian Zhu Yan, managing partner of NIO Capital, in the statement.
“Our industry expertise and entrepreneur’s perspective enable NIO Capital with more differentiation advantages [from other investment companies],” said Nathan Yu Ning, managing partner of NIO Capital. He added that the USD fund not only expanded the firm’s investment platforms, but also helped the company “integrate resources” at home and abroad to allow investees to explore new business opportunities.
The investment vehicle already poured money into companies in the fields of automobile, energy and logistics, including Chinese autonomous driving startup Pony.ai, self-driving solutions provider Momenta, ride-sharing firm Dida, and Innovusion, which delivers hybrid solid-state LiDAR systems for vehicle safety applications. Its portfolio firms also include autonomous driving trucks developer Inceptio, new energy service provider Yiqi, and digital energy firm Newlinks.
NIO Capital, founded in 2016, now manages two funds upon the completion of the new vehicle. Its first RMB-denominated fund, NIO New Energy Development Fund, was created in partnership with Asia-focused private equity firm Hillhouse Capital Group, and Sequoia Capital.
The RMB fund, which targeted to raise 10 billion yuan ($1.43 billion) in total, specializes in backing growth-stage companies in the new energy, new material, electric vehicles, internet of things (IoT), and autonomous driving industries. Yangtze River Industry Fund, a 40-billion-yuan ($5.74 billion) industry fund launched by the local government in central China’s Hubei province in late 2015, injected capital into the fund.
The development comes at a time when Nio, the Shanghai-based electric car maker backed by Tencent and Hillhouse Capital, is suffering from a decreased market demand as Beijing slashes subsidies on new energy vehicles to shrink off companies’ reliance on government support.
After years of mounting losses since it began operations in 2014, the company posted a smaller-than-expected loss of 2.38 yuan per share in the third quarter of 2019, compared with the average analyst estimate of 2.43 yuan. It delivered 4,799 vehicles in the third quarter ended September 30, compared with 3,553 deliveries in the second quarter, according to its latest financial report.
Nio raised $1 billion in an initial public offering (IPO) that valued it at $6.4 billion on the New York stock exchange in 2018.