A Shift in Strategy for Zeekr
Zeekr, Geely’s premium electric vehicle (EV) brand, has recently put its U.S. initial public offering (IPO) on hold. This move reportedly stems from a valuation mismatch and ongoing global financial market volatility, as per sources familiar with the matter.
Valuation Challenges and Market Conditions
Initially aiming for a $13 billion valuation, matching its February private fundraising, Zeekr encountered differing opinions during informal investor talks since late August. Potential investors valued the two-year-old firm below the sought IPO figure, influenced by weak market sentiment and Zeekr’s expanding operational losses. Despite its rapid revenue growth to 35.31 billion yuan ($4.9 billion) in nine months, operational losses widened to 5.23 billion yuan.
The EV Market Landscape
The decision comes amidst a turbulent period for EV stocks, with some of Zeekr’s listed peers like Nio experiencing share price fluctuations. A price war in China’s EV market has pressured profitability, prompting companies to focus on cost-cutting and strategic partnerships.
Zeekr’s IPO Plans and Achievements
Zeekr, established in 2021 to cater to China’s rising demand for premium EVs, confidentially filed for its IPO in December, targeting over $1 billion and a New York public listing as early as Q2 this year. However, the company has now adjusted its fundraising goal to a minimum of $500 million before putting the IPO process on hold.
Funding and Expansion
In February, Zeekr raised $750 million from investors, including Mobileye Global’s CEO Amnon Shashua and Chinese battery giant CATL. The company offers four EV models in China, with plans to expand into international markets like Germany, Israel, Kazakhstan, the Netherlands, and Sweden.
A Strategic Pause Amidst Global Uncertainty
Zeekr’s IPO delay reflects the challenges facing new entrants in the volatile EV market. As the brand evaluates its next steps, its focus remains on balancing growth ambitions with the realities of the global financial landscape.