Alibaba and Baidu to join Horizon Robotics as key investors in upcoming IPO

Alibaba Group Holding (NYSE:BABA) and Baidu (NASDAQ:BIDU) have joined forces as cornerstone investors in the upcoming Hong Kong initial public offering (IPO) of Horizon Robotics, a leading Chinese developer of autonomous driving technologies, according to sources familiar with the deal.

The offering has also attracted other major investors, including French shipping magnate Rodolphe Saade’s CMA CGM and a fund backed by the Ningbo government.

Together, these cornerstone investors have committed to purchasing $220 million in shares.

Horizon Robotics, which has garnered the support of high-profile backers such as China's BYD and Contemporary Amperex Technology (CATL), is aiming to raise up to $800 million in its IPO.

This would position the company as one of the largest listings in Hong Kong this year, with a pre-IPO valuation of as much as $6 billion.

Investor interest was officially gauged starting October 11, with Horizon set to begin taking orders this Wednesday.

Founded in 2015 by Kai Yu, a former AI scientist at Baidu, Horizon Robotics has emerged as a key player in the autonomous driving sector, capitalizing on the growing demand for intelligent transportation solutions in China.

Its technological expertise and partnerships, such as its 2023 joint venture with Volkswagen to create Carizon (Beijing) Technology, underscore the company's ambitions to capture future opportunities in customized driving automation.

Despite its promising trajectory, Horizon Robotics has faced financial hurdles.

The company reported a 5.1 billion yuan ($721 million) loss for the first six months of 2024, compared to a 1.9 billion yuan loss during the same period in 2023, as research and development expenses increased.

Horizon Robotics has previously attracted significant investments, including a $400 million round from investors like Baillie Gifford & Co., CPE, and CATL in 2021, bringing its Series C funding to $700 million.

The company has also benefited from strategic partnerships with major players such as Intel Corp. and Chery Automobile.