Fund co-founded by Chinese electric-vehicle maker NIO shrugs aside US-China trade war, to invest in top tech globally

Daniel Ren

NIO Capital, the technology fund co-founded by Chinese electric-vehicle manufacturer NIO, is shrugging aside the US-China trade war to pursue investments in leading technologies in the new-energy vehicles sector.

Ian Zhu, the company’s managing partner, said in an interview NIO Capital was pursuing investments with a “global perspective and open attitude”, and was eyeing only top technologies with the potential of reshaping the transport and energy sectors globally.

“We are not short-sighted, assessing only the impact from geopolitical issues before making investment decisions,” he said. “Best technologies will eventually stand out as market forces play a decisive role in commercialising them.”

He said NIO Capital will source deals worldwide, including in the United States, regardless of the trade war between the world’s two largest economies.

Co-founded with investment companies Sequoia and Hillhouse Capital two years ago, NIO Capital manages a yuan-denominated fund valued at US$1.5 billion. It is reportedly in the process of closing a dollar fund worth several hundred million US dollars, but Zhu would not elaborate on the fundraising.

Ian Zhu, managing partner at NIO Capital. Photo: Handout

The company has invested in about 30 firms, mainly in China, with total investment equally 4 billion yuan (US$581.4 million).

One of its portfolio companies, Ronbay Technology, which manufactures electrode material used in lithium-ion batteries, is among the first batch of 25 companies due to start trading on the Star Market, China’s Nasdaq-style technology innovation board at the Shanghai Stock Exchange, on Monday.

Ronbay raised 1.2 billion yuan in an initial public offering, floating 45 million shares at 26.62 yuan each, at a price-to-earnings ratio of 55.

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The new board, ordered into existence by Chinese President Xi Jinping to support the country’s technology start-ups, is designed to bolster innovation and help China sustain economic growth.

Shenzhen-based United Winners Laser, another company NIO Capital has invested in, applied to list on the Star Market late last month. Its laser-welding machines are widely used in the battery and new-energy vehicles industries.

New-energy vehicles are one of the 10 core technologies included in Beijing’s “Made in China 2025" industrial strategy, an ambitious plan that will help the country catch up with global leaders and become self-sufficient.

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China is the world’s largest new-energy vehicles market, recording sales of 1.26 million cars last year, a jump of 61.7 per cent from 2017. By 2025, Beijing wants to sell more than 3 million such cars in its domestic market.

Aside from electric vehicles, NIO Capital, whose limited partners include global energy giants BP and Total, also focuses on autonomous driving and connected-vehicle technologies, and advanced manufacturing. Momenta, one of its portfolio companies, builds intelligent systems for self-driving cars.

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