Pony AI debuts on Nasdaq at USD5 billion valuation

Chinese autonomous driving startup Pony AI went public on the Nasdaq yesterday, making it the largest initial public offering (IPO) in the autonomous driving space on the US stock market this year.

Pony AI's IPO offering was priced at USD13 per ADS (American Depositary Share), which is at the upper end of the USD11-USD13 price range. Each ADS corresponds to one ordinary share.

After expanding the size of the offering by 33.3% from the originally planned 15 million shares, the company issued 20 million ADSs to raise a total of USD260 million.

It also sold about USD153 million worth of ordinary shares through concurrent private placements, bringing the total amount raised in the IPO to USD413 million.

Notably, Pony AI was valued at just over USD5 billion in the IPO, down significantly from USD8.5 billion two years ago.

The shares fell 7.69% to USD12 at the close, giving it a market capitalization of USD4.66 billion.

Its latest market capitalization is about the same as that of WeRide, another Chinese startup autonomous driving tech company that went public on Nasdaq on Oct 25 and had a market cap of USD4.71 billion as of Wed's close.

Founded in 2016, Pony AI is one of China's first autonomous driving technology companies and is seen as the Chinese version of Waymo.

Its co-founder and CEO, Peng Jun, and co-founder and CTO, Lou Tiancheng, have both worked at Baidu, with Peng holding 17.3% of the shares as well as 55.6% of the voting rights, and Lou holding 6.1% of the shares and 19.5% of the voting rights.

Pony AI has raised a cumulative amount of over USD1.3 billion prior to its IPO and was valued at USD8.5 billion in its last funding round in Mar 2022.

Its backers include car companies such as Toyota and GAC, as well as venture capital firms such as Nio Capital, Sequoia China, and IDG Capital.

Pony AI aims to create virtual drivers for different car models and scenarios, with robotaxi, robotruck, and personally-owned vehicles (POV) businesses.

The company reported revenue of USD68.39 million, USD71.9 million, and USD24.72 million in 2022, 2023, and the first half of 2024, respectively.

In the first three quarters of 2024, the company's total revenue increased 85.5 percent year-on-year to $39.51 million.

However, autonomous driving remains a money-burning business.

From the beginning of 2022 through Jun 30, 2024, Pony AI had a cumulative net loss of USD324 million. In the first half of 2024, it reported a net loss of USD51.78 million.