Meituan’s Wang Xing leads EV maker Chehejia’s $530 million Series C

Chinese electric vehicle maker Chehejia has raised $530 million in a Series C funding round led by Meituan’s founder and CEO Wang Xing, as the company shifts into high gear for the mass production and delivery of its first SUV later this year.

Why it matters: Also known as CHJ and Leading Ideal, Chehejia has emerged as another potential homegrown rival to Tesla in China and poses a serious threat to Nio’s position in the crowded Chinese EV market.

• The Beijing-based EV maker has raised a total of $1.58 billion for a valuation of $2.93 billion, close behind Nio whose market capitalization has more than halved to $3.1 billion in the last six months.

Details: Wang Xing invested $300 million this round.

• CHJ founder Li Xiang, who held 30% of the company before the investment, poured in $100 million of his own money to maintain a majority shareholding.
• Content giant Bytedance also contributed $30 million. Existing shareholders including Matrix Partners China and Future Capital followed the round.
• Rumors about Wang’s investment were first reported by Chinese media LatePost in mid-June, saying Wang would acquire a 10% stake after the deal
• The proceeds will be used to fund mass production of its first SUV model, Leading Ideal ONE, which debuted in October last year.
• The company began taking pre-orders at RMB 328,000 (around $48,850) in April at this year’s Auto Shanghai, and promised models would be available to test drive in September and delivered two months later.
• Li was initially one of the early investors in rival EV maker Nio with a minority interest of 1.7% as of August last year. He quit the board of directors later that year, according to the company’s annual report.

Context: Young Chinese EV makers are hungry for cash amid government subsidy reductions and a challenging fundraising environment, which has prompted a reshuffling of the industry.

• EV startup Byton is reportedly seeking a total investment of about $500 million, while WM Motor in March closed its Series C of RMB 3 billion led by Baidu.
• This year, venture capital investment into China’s EV companies dwindled to only $783 million by the end of June, compared with $6 billion for the same period a year ago, according to data from market research company PitchBook.