China LiDAR specialist Hesai aims for US IPO

If successful, the company would become one of the first Chinese businesses to go public in the US after the two countries appeared to resolve their longstanding auditing dispute. At the end of last year, US regulators said they had gained full access to audits of Chinese companies that trade on US exchanges for the first time.

The IPO path has essentially been blocked since mid-2021 amid concerns that the dispute would result in Chinese companies being delisted in the US. In addition, Chinese regulators added to the compliance burden for overseas listings. Hotel chain Atour Group broke the deadlock when it debuted on NASDAQ last November.

Hesai applied to list on Shanghai's Star Market in 2020 but withdrew early the following year. At the time, an investor in the company noted that the listing procedure is lengthy, and once started, applicants are unable to raise new funding because they can't change their shareholder structure. Hesai closed a USD 300m Series D shortly thereafter, followed by a USD 70m extension.

Founded in 2014, the company provides LiDAR technology used in advanced driver assistance systems (ADAS), autonomous driving, and robots. It has shipped more than 100,000 units to date, including 80,400 units in 2022 alone, according to a prospectus.

Hesai has a manufacturing facility in Shanghai with an annual production capacity of 37,000 units. A new factory is expected to begin production this year that will take capacity to 1.2m units.

Of last year's shipments, 77% went to ADAS customers, reflecting the demand for these systems for high-end electric vehicles (EVs). The company supplies the likes of Li Auto, Jidu, and Lotus.

In autonomous driving, it counts 12 of the top 15 global manufacturers as customers. They include Baidu, Aurora, AutoX, Pony.ai, and WeRide. In robotics, Hesai has entered into multi-year agreements with Nuro, Meituan, and Neolix for solutions in last-mile delivery services.

ADAS is set to become the major use-case scenario. Frost & Sullivan projects that the global market for LiDAR solutions in ADAS will be worth USD 64.9bn by 2030, up from USD 200m in 2021.

Hesai's revenue reached CNY 720.8m in 2021, up from CNY 415.5m in 2020, while its net loss grew from CNY 107.2m to CNY 244.8m and its gross margin narrowed from 57.5% to 53%. In the first nine months of 2022, revenue hit CNY 793.5m - said to be 3.6x that of the largest listed LiDAR player.

Lightspeed China, the company's earliest backer, holds an 8.2% stake. Lightspeed's global funds invested heavily in later rounds and hold 9.3%. Baidu, Bosch, and Xiaomi own 6.8%, 6.6%, and 6.3%, respectively.

The Series D was led by GL Ventures and Xiaomi provided the extension through the Xiaomi Industrial Investment Fund. These investments followed a USD 173m Series C led by Bosch and Lightspeed China and featuring ON Semiconductor, Qiming Venture Partners, Detong Capital, and Axiom Asia.

Baidu participated in earlier rounds alongside the likes of ZhenFund and Pagoda Investment.

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• Topics
• Greater China
• IPO
• Technology
• China
• Lightspeed Venture Partners
• Xiaomi
• Baidu
• automobiles
• autonomous driving
• GL Ventures