China's Pony AI seeks up to $4.55 billion valuation in upsized US IPO

By Arasu Kannagi Basil

(Reuters) -Pony AI is targeting a valuation of up to $4.55 billion in its upsized U.S. initial public offering, it said on Wednesday, indicating strong demand for the Chinese robotaxi firm's long-sought New York listing.

Toyota-backed Pony is now seeking up to $260 million by offering 20 million American depositary shares (ADSs) priced between $11 and $13 each. It was earlier planning on selling 15 million ADSs.

Guangzhou-based Pony is the latest Chinese robotaxi firm tapping U.S. capital markets as the industry looks to scale its operations.

Two investors, including Chinese carmaker BAIC, had indicated interest in buying shares worth $74.9 million in the IPO. Certain investors had also agreed to purchase $153.4 million worth of shares in concurrent private placements.

Rival Chinese robotaxi firm WeRide went public on the Nasdaq last month after raising $440.5 million in its IPO and concurrent private placements. The stock has gained 24.5% since then, as of its last close.

"WeRide's trading has given them (Pony AI) some confidence to move forward with this deal, particularly following Trump's re-election," Renaissance Capital senior strategist Matt Kennedy said.

"The prospect of a Trump presidency had been - and continues to be - a source of uncertainty for any large Chinese issuer in the U.S. For now, they see an opportunity to go public and they're taking it."

General Motors-backed self-driving firm Momenta's U.S. IPO also got approval from China's securities regulator, in June.

AUTO SECTOR LEADS PICKUP IN CHINESE IPOs

Led by electric-vehicle maker Zeekr's $441 million listing, U.S. IPOs of China-domiciled companies have raised $841.2 million in 2024, up 79% from last year, LSEG data showed.

That is still well below the $12.85 billion Chinese firms raised in 2021 on U.S. exchanges.

"The floodgates aren't open, but the tide is rising. After some very poor returns in 2021, U.S. IPO investors are once again warming up to the idea of buying Chinese issuers," Kennedy said.

"In order for that trend to hold, we'll need to see some winners."

At $260 million, Pony's listing would be the second-biggest U.S. IPO this year by a China-based company after Zeekr.

That would also be above Pony's original target. In September, its board slashed the minimum expected IPO proceeds to $200 million from $425 million.

The company plans to list on the Nasdaq under the symbol "PONY".

Goldman Sachs, BofA Securities, Deutsche Bank, Huatai Securities and Tiger Brokers are underwriting the IPO.

(Reporting by Arasu Kannagi Basil in Bengaluru; Editing by Shounak Dasgupta and Devika Syamnath)