Chinese EV maker Li Auto's chip unit to raise at least $243m in first equity financing

Chinese EV maker Li Auto's chip unit to raise at least $243m in first equity financing

FILE PHOTO: Semiconductor chips are seen on a circuit board of a computer in this illustration picture taken February 25, 2022. REUTERS/Florence Lo/Illustration/File Photo

Publicly listed Chinese electric vehicle (EV) maker Li Auto announced on Friday that its chip and domain controller unit, Shanghai Mahe Xin Technology (MHX Technology), is raising its first equity funding round of 1.625 billion yuan ($242.9 million).

Shanghai-headquartered MHX Technology entered into agreements to raise 1 billion yuan ($149.5 million) from the parent company. The remaining 625 million yuan ($93.4 million) will come from a group of external investors led by China-focused Lanchi Ventures, previously known as BlueRun Ventures China; HyT Capital; and an investment vehicle under iMPC, formerly Matrix Partners China; with participation from MiraclePlus.

Under the agreements, the iMPC-controlled vehicle called Hangzhou Jingtao is granted a right on a one-off basis to make a further investment of up to 500 million yuan ($74.7 million) in MHX Technology under the same pricing terms on or before December 31.

A full exercise of iMPC’s additional subscription right, alongside MHX Technology’s planned adoption of two employee share incentives, will drive the post-money valuation of MHX Technology to 17.1 billion yuan, according to an announcement from Li Auto.

Once completed, the transactions will see Li Auto maintain a controlling 74.01% equity stake in MHX Technology, while external investors and incentive-plan entities hold 6.58% and 19.41%, respectively. Li Auto will continue to consolidate MHX Technology’s financial results.

Leveraging its dedicated chip and domain controller expertise, MHX Technology is seeking to capitalise on broader industrial opportunities, particularly across non-auto sectors, for enhanced economies of scale.

Its debut equity funding round will enable the company to advance its R&D and commercialisation efforts, while the share incentive plans are expected to attract and motivate key talents, said Li Auto.

Edited by: Joymitra Rai

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