NIO Capital raises new RMB 3 bln fund despite cooling VC climate · TechNode

NIO Capital raises new RMB 3 bln fund despite cooling VC climate · TechNode

2024-02-06 14:36:53

The NIO-related growth-stage investor has backed some of the rising stars in the Chinese automotive world such as Momenta.

Mobility new energy vehicle electric vehicle EV nio capital venture capital VC china self-driving cars autonomous driving
A NIO ET9 was displayed during a press conference in the northwestern Chinese city of Xi’an on Dec. 23, 2023. The executive sedan is equipped with three lidar components for automated driving on the car’s roof and both car body sides, provided by Seyond, formerly known Innovusion, a NIO Capital portfolio company. Credit: NIO

NIO Capital, a venture capital firm founded by Willliam Li, chief executive of the namesake electric vehicle maker, has raised a new China-focused fund of more than RMB 3 billion ($416.8 million), despite a global market lull and domestic economic challenges. 

Why it matters: The fundraising milestone will allow NIO Capital to further explore the “transformative potential of innovative technologies in the automotive and energy sectors,” said Ian Zhu, a managing partner at NIO Capital, in a Monday announcement. 

  • The NIO-related growth-stage investor has backed some of the rising stars in the Chinese automotive world, from battery material manufacturer Ronbay to self-driving car startups Momenta and Pony.ai. It has also invested in battery giant CATL. 

Details: The deal shows the strength of NIO Capital’s ties with its limited partners, which include venture capital investment guidance funds set up by Chinese regional governments, national funds, family offices, and listed companies, according to the announcement, which did not provide further details. 

  • The Shanghai-based venture firm said it will maintain its focus on areas such as auto tech and sustainable energy with the new RMB 3 billion fund, which brings the total assets under its management to about RMB 15 billion. 
  • Speaking to Chinese reporters, a NIO Capital representative stressed the fund’s independence from NIO in its final investment decision-making. “We don’t require that a parts maker only supplies to NIO,” the person said as an example of its open-mindedness, 36Kr reported.

Context: The deal comes as global private investment remains soft due to interest rate hikes and economic headwinds. 

  • Fundraising totals were on track to drop 28% in 2023 compared with 2022, and the number of funds could decline by almost half, US management consultancy Bain & Company said in a note dated July 17. 
  • In China, roughly 5,300 private capital funds raised a total of RMB 1.35 trillion during the first nine months of 2023, down 2.1% and 20.2% from a year earlier, according to consultancy Zero2IPO (in Chinese).

Jill Shen is Shanghai-based technology reporter. She covers Chinese mobility, autonomous vehicles, and electric cars. Connect with her via e-mail: jill.shen@technode.com or Twitter: @jill_shen_sh