(Text/Pan Yuchen Editor/Zhou Yuanfang) Geely Group has its fourth listed company, and this time it is the first share of China automobile intelligent enterprises in the United States-Yikatong.
On December 21st, Yikatong Technology, a travel technology company, and COVA Acquisition Corp, a public special purpose acquisition company, jointly announced that the previously announced merger transaction had been successfully completed on December 20th. The merged company will retain the company name of "Yikatong Technology", and its shares and warrants will be traded on the Nasdaq Stock Exchange on December 21st, with the stock codes of "ECX" and "ECXWW" respectively, making it the first China automotive intelligence start-up to land in the US stock market.
Through this transaction, Yikatong Technology is expected to raise 368 million US dollars (about 2.57 billion yuan), including COVA’s cash trust of 300 million US dollars. The funds raised will be used to accelerate technology development and launch new products, support strategic acquisitions and investments, and build a global business growth path and achieve the goal of becoming profitable in 2024.
Earlier in May this year, Yikatong Technology had reached a merger agreement with COVA. The transaction was approved at the extraordinary general meeting of COVA shareholders held on December 14th.
Yikatong Technology is listed on Nasdaq. Image source: Yikatong Technology
According to the prospectus disclosed by Yikatong Technology, the company’s revenue in the first three quarters of this year was 2.03 billion yuan and its gross profit was 563 million yuan. However, after deducting R&D expenses, administrative expenses and interest expenses, the net loss amounted to 801 million yuan. External financing has become a key factor for the company’s sustainable operation.
According to the data of enterprise investigation, before the merger and listing of Yikatong Technology, it had gone through seven rounds of financing. In addition to Geely Holding Group, the investors also included Changjiang Industrial Fund, Baidu, Funeng Technology and Suzhou Xiangcheng Venture Capital. Among them, the announced A-round financing amounted to RMB 1.3 billion, and the A+ round and B-round financing amounted to US$ 200 million and US$ 50 million respectively.
Yikatong Technology is not the first Geely Group investment company that intends to land in US stocks. Just in early December, Geely Automobile’s high-end electric brand Krypton submitted a draft registration statement for possible initial public offering to the SEC. According to Reuters and other media reports, the IPO is expected to raise more than $1 billion.
At present, there are four listed companies under the Geely Group. In addition to Geely Automobile, which landed in Hong Kong stocks earlier, Polar Star and Volvo have also landed in the US and Sweden markets this year.
The "first son" of Geely family
As a company specializing in automotive intelligence, Yikatong Technology, established in 2017, is a pioneer among its peers, and has been imbued with a strong "auspicious color" since its birth.
The two co-founders of Yikatong Technology are Li Shufu, Chairman of Geely Holding Group, and Shen Ziyu, former Vice President of Geely Research Institute. When a merger agreement was reached with COVA in May this year, Li Ni, the daughter of Li Shufu, also appeared in the list of new directors of the company.
Yikatong Technology Image Source: Yikatong Technology
Like his elder brother Li Xingxing, Li Ni has been expanding his participation in the cause of Geely in recent years. As early as 2016, Li Ni bought and sold shares of listed companies many times during the listing and transfer of *ST Qianjiang’s equity. Later, Geely Holding Group spent 1 billion yuan to purchase *ST Qianjiang’s equity in June of that year.
Just in August this year, Xingshengzhou Technology purchased 171 million shares of Chengxing Industrial Group, the controlling shareholder of ST Chengxing. According to ST Chengxing’s announcement, Xingshengzhou Technology is a limited partnership jointly established by Yaoning Technology and Oriental Assets. Li Xingxing and Li Ni hold 95% and 5% shares of Ningbo Chunhua Qiushi Technology, the largest shareholder of Yaoning Technology, respectively.
The insiders believe that the reason why Li Shufu’s family is willing to hold a company with operational difficulties is the phosphorus chemical industry that ST Chengxing is engaged in: the phosphate produced by the latter is the core raw material for automobile power batteries.
Similarly, Yikatong Technology, as a company born in line with the trend of automobile intelligence, can be called Geely’s "pro-son".
Since its establishment, Yikatong Technology has mainly provided intelligent and networked services for Geely, Lectra, Proton and other "Geely" automobile brands, including digital cockpit, active safety electronic products, unmanned sensors and controllers, and the operation services of the vehicle networking cloud platform and big data platform. For example, the GKUI car-machine interconnection system widely used in Geely models comes from Yikatong Technology.
GKUI Image source: Geely Holding Group
Prior to this, emerging business modules such as intelligent cockpit and vehicle-machine interaction have been regarded as shortcomings by many Geely users.
Even as a high-end electric brand, its car system has been criticized by many car owners since the delivery of the first batch of models. Although on the hardware level, Geely temporarily calmed the storm by investing more than 300 million yuan to replace the car chip with higher performance; However, in the software, a common shortcoming of traditional automobile manufacturers, Geely seems to have a lot to check and fill.
And this task is also naturally delivered to the hands of Yikatong Technology.
