China's robotaxi firm Pony AI valued at $5.25 billion as shares jump in strong Nasdaq debut

(Reuters) -Shares of Pony AI rose about 15% in their market debut on Wednesday, giving the robotaxi company a valuation of $5.25 billion, in an indication of a positive investor approach to China-based firms.

The company's depositary shares opened at $15 in their Nasdaq debut, compared with the IPO price of $13.

The IPO comes after nearly two years of uncertainty following Didi Global's delisting amid regulatory backlash in China, with Beijing easing tensions by resolving a long-standing audit dispute with the U.S. accounting watchdog in December 2022.

However, the company faces other challenges, including public skepticism about autonomous vehicles, data privacy concerns, and competition from companies, including Elon Musk's Tesla (NASDAQ:TSLA ), which has promised to roll out driverless ride-hailing services to the public in California and Texas next year.

Pony AI has said that its U.S. operations will remain "limited in scope" for the foreseeable future.

Other China-based companies, including EV maker Zeekr and self-driving tech firm WeRide, also went public in the U.S. earlier in the year amid a backdrop of the country's IPO market picking up recently, with investors showing renewed interest in promising tech startups.

Pony AI sold 20 million American depositary shares in the IPO, priced to investors at $13 each. It also raised an additional $153.4 million in concurrent private placement.

The Toyota (NYSE:TM ) Motor-backed company's valuation has come down from $8.5 billion two years ago.

Analysts caution that widespread robotaxi adoption could take years due to safety and reliability challenges, although China has been quicker to approve trials than the U.S.



Pony AI remains unprofitable as it invests in expanding operations.

Goldman Sachs, BofA Securities, Deutsche Bank (ETR:DBKGn ), Huatai Securities and Tiger Brokers were the underwriters for the IPO.

Source: Investing.com