China EV chassis maker U Power gets Series B funding
U Power, a China-based manufacturer of electric vehicles (EVs) and smart EV chassis, has raised several hundreds of millions of renminbi in Series B funding led by Hefei Industry Investment.
Existing investors Matrix Partners China, China Creation Ventures, ZhenFund, and EV-focused Huoyan Capital re-upped.
MergerMarket, AVCJ's sister publication, reported last December that U Power hoped to raise around CNY 300m-CNY 500m (USD 43m-USD 72m).
As part of the new funding round, the company has agreed to relocate its headquarters from Shenzhen to Hefei, the capital of Anhui province. Hefei will also become the centre point of a newly established R&D, production and sales system covering commercial and passenger vehicles as well as chassis. U Power also has offices and R&D facilities in Shanghai, Chongqing, and Silicon Valley.
This is not the first time Hefei has used relocation as an investment condition. In 2020, the government provided what was effectively a CNY 7bn bailout for EV maker Nio, which duly moved its headquarters to the city. The company also transferred core assets, including R&D, manufacturing and sales and services capabilities, to an entity in which the government is an investor.
U Power will use the new capital to improve chassis technology, for R&D, and to accelerate mass production of two EVs - one commercial model and one off-road model, according to a statement.
The company was founded in early 2021 and subsequently launched what it claims is China's first skateboard chassis-by-wire. The product enables digital control over power, braking, steering, and suspension. This allows EV customisation at lower cost, with carmakers only needing to focus on vehicle cabin development. There is more cabin space because batteries are integrated into the chassis.
Peng Li, founder and CEO of U Power, said in an earlier statement that the board can cut car development time to as little as 12 months for new players in the industry.
Hefei Industry Investment first backed U Power in the first half of 2022, committing CNY 160m (USD 23m) at a post-money valuation of CNY 2.7bn, according to Merger Market. Matrix and ZhenFund were among the earliest investors, participating in a pre-Series A round. Bosch then joined a Series A in October 2021.
Other recent funding rounds for companies in the smart chassis space include a CNY 400m Series C for Global Technology and a CNY 200m Series A for Bibo.
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