May 26, 2022

In the pursuit of automotive startups, the investment game in China is becoming increasingly competitive, with not only well-known venture capital firms but also industry giants joining in. Two mobility-focused funds that recently closed new rounds are backed by the country’s leading electric vehicle startups.

Rockets Capital, a new growth-stage venture capital and investment vehicle, announced earlier this month the closing of its first $200 million fund, with electric vehicle maker Xpeng as the main investor. Other investors include leading institutional names in China, including IDG Capital, Sequoia China, GGV Capital, 5Y Capital and e-Garden. The fund is looking for opportunities in the value chain of the automotive industry, clean energy and other advanced technology sectors.

Another major finish to the week is Nio Capital’s $400 million oversubscribed fund, Eve One Fund II. Investors range from sovereign wealth funds, insurance companies, multilateral financial institutions, funds of funds, family offices, pension funds to funds around the world.

Nio Capital was founded by Xpeng’s main competitor, Nio founder William Lee (hence the fund’s name), although the investment company is not directly related to the automaker. The company manages a RMB fund with its US dollar fund, focusing on the automotive, technology and energy sectors.

Rockets Capital is making its relationship with its electric vehicle investor more public. While it will operate as an independent investment company, it will also leverage Xpeng’s “industrial experience and resources” and “incubate technological innovation.” Given the announced mission statement, it is not surprising that some of Rockets’ future portfolio companies also do business with or partner with Xpeng.

Nio Capital, founded in 2016, is a leader in the investment field. Some of the most notable deals in China include two major AX robot companies — Bosch-backed Momenta and Toyota-backed Pony.ai, the lidar manufacturer Innovation, Temasek, which is one of BP-backed Nio’s suppliers for Aulton battery replacements. . , and a manufacturer of automotive chips black sesame.

In recent years, Nio Capital has built a stronghold around itself with new players in the Chinese auto industry. It is time to see how Rockets Capital and its mentor Xpeng hold up and what alliances they can forge to change the market.

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