Only two rounds of valuation of 90 billion, Ningbo unicorn to IPO.

Image source @ vision china

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Another new car-making force started the pace of listing in the United States.

Recently, Krypton Automobile (hereinafter referred to as Krypton) submitted an IPO prospectus to the American Securities Exchange, and plans to list on the new york Stock Exchange with "ZK" as the stock code.

This is the eighth IPO of Li Shufu, a "car madman" after the 1960s. Going forward, it turns out that Li Shufu has already held seven listed companies: Geely Automobile, Volvo Automobile, Polar Star, Yikatong, Qianjiang Motorcycle, Hanma Technology and Lifan Technology.

Li Shufu was born in the countryside of Taizhou, Zhejiang Province, but he has an excellent business mind. In 1982, he started a business and set up a photo studio, and gained millions of dollars. Later, he worked as the director of a refrigerator factory and a decoration material factory, all of which created considerable achievements. In 1993, after he had the idea of building a car, it was out of control. From motorcycles to the establishment of Geely Automobile, he continued to expand mergers and acquisitions and eventually grew into a car giant group.

As early as August this year, the website of the China Securities Regulatory Commission disclosed the filing notice of extremely krypton overseas issuance and listing, so the extremely krypton IPO has already attracted much attention.

At that time, it was reported that Krypton hoped to raise more than $1 billion at a valuation of $18 billion. If true, it will be the largest IPO of China company in the United States since Didi raised $4.4 billion in mid-2021.

According to the last round of post-investment valuation of $13 billion (about 90 billion yuan) completed before its listing, there is still a distance of $18 billion, so let’s leave suspense first. What’s even more commendable about this extremely krypton listing is that it has set a new record for the fastest listing of new car-making forces in China.

Founded in Ningbo in 2021, Krypton, as a brand-new electric brand under the traditional automobile company Geely, shoulders the heavy responsibility of Geely’s entry into the luxury pure electric market. Krypton is jointly invested by Geely Automobile and Geely Holding Group, with Geely Automobile holding 51% and Geely Holding Group holding 49%. The chairman and CEO of the company are also appointed by Li Shufu, chairman of Geely Holding Group, and An Conghui, chairman of Geely Automobile.

Throughout the development of krypton, its greatest feeling is that it is "fast".

First, the valuation has risen rapidly, and the road to listing has gone fast.

It took Li Shufu less than two years from its establishment in March 2021 to a valuation of 90 billion yuan. The road to IPO is only two years. In contrast, Wei Xiaoli took four years, six years and five years respectively.

Second, the product release and delivery speed is very fast.

Within two years after its establishment, Krypton has released models such as Krypton 001, Krypton 001FR, Krypton 009 and Krypton X, with frequent explosions:

Extreme Krypton 001 ranks first in the sales of pure electric vehicles with more than 300,000 yuan, and the newly released 001 FR has become the fastest mass-produced electric vehicle; Extreme Krypton 009 became the champion of MPV sales of more than 500,000 yuan; Krypton X is the only China brand in the top ten sales volume of compact cars with a price of over 200,000 yuan.

In 2022, the annual delivery of Krypton exceeded 70,000 units, making it the only brand of mainstream new energy to achieve the delivery target. By the end of October, 2023, the monthly delivery of krypton has increased for nine consecutive months, with a total of 170,053 vehicles delivered in two years, which is one of the fastest delivery brands in the high-end pure electric vehicle market in China.

The global market expansion of Krypton is also expanding rapidly. Since the announcement of the European strategy this year, the first batch of offline direct-operated stores overseas have landed in Sweden and the Netherlands, and the polar 001 and polar X have been sold in Sweden, the Netherlands and Germany, and the delivery will be completed within this year. Next year, krypton will be sold in major developed countries in western Europe, and the European market is expected to increase to six countries in 2024.

Third, correspondingly, krypton makes money faster.

According to the prospectus, the revenue composition of Extreme Krypton mainly comes from three businesses, including vehicle sales, three power businesses, research and development and other services. Among them, vehicle sales are the cornerstone to support the performance of Krypton.

From 2021 to the first half of 2023, the company’s vehicle sales revenue reached 1.544 billion yuan, 19.671 billion yuan and 13.175 billion yuan respectively, with a year-on-year increase of about 148.75% in the first half of 2023.

Sandian business, R&D and other services have also become a major growth point to enhance the company’s revenue. In 2021, 2022 and the first half of 2023, the business income was 4.983 billion yuan, 12.228 billion yuan and 8.095 billion yuan respectively. This makes krypton’s revenue composition more diversified.

Gross profit margin is also increasing. In the first half of 2023, the gross profit margin of Krypton vehicles reached 12.3%, a year-on-year increase of 7.6 percentage points. It is also expected to become the earliest and fastest electric vehicle company to make money except Tesla.

Of course, the rapidly expanding krypton loss is also increasing. From 2020 to 2022, the net profit of Krypton was 104 million yuan,-4.514 billion yuan and-7.655 billion yuan respectively. The net loss in the first half of this year was 3.871 billion yuan, compared with 3.085 billion yuan in the same period last year.

In terms of research and development, in the first half of 2023, the company invested 3.189 billion yuan in research and development, up 56.09% year-on-year. From 2021 to the first half of 2023, the accumulated investment in research and development reached 11.795 billion yuan.

By June 30th, 2023, Krypton had 18 Krypton centers, 219 Krypton spaces, 29 Krypton delivery centers and 40 ZEEKR House. As of the same day, Krypton has established 746 charging stations in more than 120 cities in China, and based on the support of third-party charging stations, it has accumulated over 520,000 charging stations in more than 340 cities in China.

According to the prospectus, about 45% of the net proceeds from IPO will be used to develop more advanced pure electric vehicle technology and expand product portfolio; About 45% will be used for sales and marketing, and expand the service and charging network; About 10% will be used for general corporate purposes.

The "quickness" of krypton is inevitable.

On the one hand, in the face of fierce competition in the industry, even the subsidiaries of traditional car companies must participate in the competition with the mentality and urgency of startups and the talent structure similar to that of technology companies.

Secondly, it relies on Geely, which has more than 20 years of experience in making cars, and its luxurious car-making ecosystem. Therefore, Krypton has rich resources such as technology and capital at the beginning. An Conghui also said before that Krypton is not short of money, but more concerned about how to truly establish its own industrial chain and ecological circle through the capital market.

Due to the relatively abundant funds, compared with the need for multiple rounds of financing caused by new forces, Krypton only melted into two rounds, with a total financing amount of 1.25 billion US dollars.

The first financing was in August, 2021, and Krypton received a $500 million Pre-A round of financing, with investors including Intel Capital, Contemporary Amperex Technology Co., Limited, Billie Billie, Hongshang Group and Boyu Investment. These shareholders have super strength and unique advantages in the fields of intelligent innovation and technology, new energy ecological technology, insight of young users, vertical integration of raw materials and new consumption.

The second time was in February, 2023. Krypton announced the completion of $750 million Series A financing, with a post-investment valuation of $13 billion. This round of financing was invested by five eco-partners: Amnon Shashua, founder and CEO of Autopilot Technology Company Mobileye, Contemporary Amperex Technology Co., Limited, Yuexiu Industrial Fund, Trading Fund and Quzhou Xin An Zhi Creation Fund. They have core competitiveness in intelligent driving, power batteries, innovative materials and high-end equipment manufacturing.

For Krypton, these nine investors are rich in industrial resources in their respective fields and can build a comprehensive car-making ecology.

It can be seen that some shareholders have already cooperated with Krypton. The smart driving chips of the current three models come from shareholder Mobileye, and the two parties plan to jointly launch the world’s first consumer-grade smart driving electric vehicle with L4 smart driving capability in 2024.

Contemporary Amperex Technology Co., Limited and Kykrypton, who were present at both rounds of investment, signed a five-year long-term strategic cooperation agreement in August 2022. At present, Contemporary Amperex Technology Co., Limited Kirin battery has been mass-produced and loaded on Kykrypton 009 and Kykrypton 001 models.

In addition, Krypton has become the preferred partner of the world’s top auto parts and technology companies such as Waymo, a world-renowned driverless technology company owned by Google, NVIDIA, a leader in artificial intelligence computing, and Ansenmei, a leading semiconductor manufacturer. It is reported that Thor, the latest computing chip from NVIDIA, will also be launched on the Krypton model.

The time node of this extreme listing has broken the silence of the car-making forces landing in the capital market in recent years.

The upsurge of new car-making forces going public in the United States can be traced back to three years ago, when Xpeng Motors was successfully listed on the NYSE. In the past three years, the capital market has changed, and the industry has fallen into extreme involution. The listed "Wei Xiaoli" is being delivered in volume, and other car companies are struggling to support it, and many of them are in danger.

As the first batch of new forces to build cars in China, Weimar, which has been in financial crisis for 12 rounds, is constantly suffering from huge losses. The latest news is that the transaction to be listed on the backdoor has been suspended; Evergrande in Xu Jiayin is in financial trouble; Singularity Automobile recently added a piece of information about the person to be executed, and the execution target reached more than 130 million yuan; Baiteng Automobile, Horizon Automobile, Reading Automobile, etc. are also rumored to have left due to huge financial problems.

Some "backward students" are still desperately accelerating.

On August 31st this year, Aouita officially announced that it had completed the Series B financing of 3 billion yuan, with a post-investment valuation of nearly 20 billion yuan. On August 29th, Nezha Auto also announced the completion of the 7 billion Crossover financing. Chinese Express and Bentley Motors have recently taken money from local tyrants in the Middle East.

Generally, unprofitable new car-making enterprises need more external funds for blood transfusion to cope with the more intense industry elimination in the future. The extreme IPO has changed the pattern of the car-making industry, which has been quite quiet in recent years.

Speaking of it, Geely Automobile, which Li Shufu is at the helm, is probably the most adept at capital operation in China.

In 2010, Li Shufu bought Volvo from Ford Motor Company and staged a classic M&A case of "snake swallowing elephant" in automobile history. In 2017, Li Shufu also successfully acquired Proton Malaysia, Lotus, a British luxury sports car brand, and Terrafugia, an American flying car company.

In addition to krypton, he has also been listed for several subsidiaries in the past two years. In 2021, Volvo made a public offering on the Stockholm Stock Exchange in Sweden, followed by Polar Star and Yijiatong on Nasdaq. Lotus Technology reported this year that it will be listed on the US stock market through SPAC. Cao Cao, a subsidiary of Geely Holding, also reported that he would go to Hong Kong for IPO in 2023.

Today, Li Shufu’s eighth IPO is on the line. However, it must be admitted that at present, it is extremely difficult to get a market valuation equivalent to that of the next "Wei Xiaoli". The environment in which it is listed on the US stock market and the active period of the capital market are completely different.