China’s exclusive tech crackdown thwarts Pony.ai’s SEO plans in the US – sources
By Krystal Hu, Kane Wu, Julie Zhu and Yilei Sun
(Reuters) – Self-driving startup Pony.ai has suspended plans to go public in New York City through a merger with a blank check company valued at $ 12 billion, after failing to secure Beijing’s l assurance that she would not become the target of a crackdown on Chinese tech companies, people familiar with the matter said.
The move makes Pony.ai one of the largest companies to suspend its US listing plans after China banned rideshare giant Didi Global Inc https://www.reuters.com/business/didi -shares-slump-25-china-crackdown -2021-07-06 to enroll new users just days after its successful initial public offering (IPO) in June.
It followed with crackdowns on other Chinese tech companies over concerns about the security of user data, leading some companies, such as LinkDoc Technology and Hello Inc, to abandon their state listing plans. -United.
The Toyota Motor Corp-backed startup will now seek to raise funds in a $ 12 billion private fundraiser, said the sources, who requested anonymity because the matter is confidential . He is still hoping for a listing in the United States in the unlikely event that he receives the green light from the Chinese government imminently, the sources added.
Operating in both the United States and China, Pony.ai maintains a significant presence in Chinese cities, including Beijing and Guangzhou, where it has launched shuttle pilot projects and signed partnerships with Chinese automotive groups.
He was concerned that Chinese regulators could take action if he made an entry into the US stock market, the sources said. Details of Pony.ai’s discussions with Chinese authorities could not be known.
ADVANCED SPAC CONFERENCES
Pony.ai was in exclusive talks to go public through a merger with special purpose acquisition company (SPAC) VectoIQ Acquisition II. The deal was reportedly funded by a private placement from investors of around $ 1.2 billion, and the company aimed to be listed in October, the sources said.
A spokesperson for Pony.ai said the company could not confirm its intention to go public or give a timeline. China’s Cyberspace Administration, which is leading the crackdown on tech companies like Didi, did not immediately respond to a request for comment. VectoIQ declined to comment.
Had Pony.ai gone ahead with listing, it would also have come under scrutiny from the United States. The United States Securities and Exchange Commission said last month that it would not allow Chinese companies to raise funds in the United States unless they fully explain their legal structures and disclose the risk that Beijing is interfering in their activities.
The Committee on Foreign Investments in the United States, which reviews the transactions of companies with foreign ties for potential national security risks, also reviewed PSPC transactions.
Pony.ai CEO James Peng told Reuters in June that the company is considering going public in the United States to help fund its goal of marketing driverless limousine services. He didn’t provide any details on how that would happen.
In May, Plus, a stand-alone trucking company with operations and partnerships in China, struck a deal to go public through a $ 3.3 billion merger with Hennessy Capital Investment Corp V, ahead of the tech crackdown on the China. This agreement is still expected to be concluded by the third quarter.
Pony.ai, which develops and tests its self-driving vehicles in the United States and China, said in November that its valuation reached $ 5.3 billion after raising more than $ 1 billion in funding.
In June, the company hired Lawrence Steyn, vice president of investment banking at JPMorgan Chase & Co, as CFO to prepare a public listing.
VectoIQ II is the second SPAC led by former General Motors vice president Steve Girsky, whose first SPAC has entered into a deal with electric truck maker Nikola Corp. He raised $ 300 million in an initial public offering in January.
(Reporting by Krystal Hu in New York, Kane Wu and Julie Zhu in Hong Kong, Yilei Sun in Beijing; Additional reporting by Hyunjoo Jin in Berkeley, Calif .; Editing by Matthew Lewis)