Feb.21, China – Hozon New Energy Automobile, the owner of Neta Auto (Neta) brand, had recently completed a new funding round of financing exceeding RMB2 billion (USD316 million), Chinese media outlet LatePost reported. Major investment institutions included CRRC Group’s CRRC Fund and Shenzhen state-owned Capital Group.
Neta’s Financing Process
In October 2021, Neta announced the completion of a RMB 4 billion Series D1 round of financing, with Qihoo 360 leading a RMB 2 billion investment.
In December 2021, Neta disclosed Series D++ round of financing involving CATL, Qihoo 360 and BAIC Investment, which LatePost knows to be approximately RMB 2 billion.
With the completion of Series D funding, Neta is valued at over RMB 25 billion. Neta has now opened a Pre-IPO round with a target valuation of approximately RMB 45 billion ( USD7 billion), and plans to launch an IPO in Hong Kong within the year.
Concerns of Mainstream USD Fund Investors
There are two areas of concern for investors. One is that unlike “NIO” which is targeting the RMB200,000 and even 300,000+ luxury car market, Neta’s current main models, Neta U Pro and Neta V, are priced at RMB100,000, with starting prices of RMB109,800 and 62,800 respectively after subsidies.
The RMB100,000 price range is the future most competitive market, where traditional mainstream joint ventures and independent brands have been operating for a long time, but also where the dominant new car makers will explore when they further expand their markets. Some investors are sceptical that Neta will be able to maintain strong sales in this market.
Investors’ concerns also include the possibility that some of the cars Neta sells will be used for business purposes, such as online cabs, rather than private cars, which could affect the car brand’s performance in the largest private car market in the long run. Last November, Neta CEO Zhang Yong disclosed that Neta’s direct sales to B-side customers, such as cab companies, were about 9 percent of total sales at the time, which was slightly lower than the industry average of 12 percent according to CPCA.
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