By ZHOU Shuqi
Chinese autonomous driving company Momenta is planning on raising as much as US$1 billion (6.9 billion yuan) in an IPO on HKEX or Nasdaq, Reuters reported on Tuesday.
The Beijing-based company was founded in 2016. Momenta was one of the few companies in China with a permit for gathering high-definition maps, a key tool in autonomous driving.
Backed by SAIC Motor, GM's Chinese partner, as well as Toyota and Daimler, Momenta works with automakers on mass production of self-driving vehicles. By 2021, Momenta had completed seven rounds of financing, receiving funds from automakers and Tencent.
Constantly updating algorithms
Momenta combines a data-driven approach with iterating algorithms – referred to as the “flywheel approach.”
The company is in the process of collecting data through its own Level 2 products to support the R&D and commercialization of Level 4 products. Strategy is focused on both Mpilot, a mass-production-ready autonomous driving solution, and Momenta Self-Driving (MSD), a driving solution targeting full autonomy.
A number of models including SAIC-backed EV startup IM Motors have already been equipped with the Mpilot system.
Universal funding problem
Automakers and technology firms have invested billions of dollars in autonomous driving, jockeying for position to take an early lead in what some consider the future of mobility.
As little as two years ago, investor zeal for EV-related startups was running high, and investors were pouring cash into the EV space, hoping to find the next Tesla. Aspiring manufacturers have raked in many billions of yuan before making or selling a single car.
In the last year, though, patience for EV startups has started to fade. Autonomous driving companies worldwide face a universal problem of creating a balance between the astronomical costs of R&D and problem of how to turn research into real money.
Industry insiders hope that as the economy recovers, autonomous driving companies may find it easier to get funding. Argo AI backed by Volkswagen and Ford went bust in July last year after burning up US$2.6 billion that Volkswagen injected in 2020. Blockbuster Waymo of Google has launched mass layoffs twice this year due to financial problems. Its market value has dropped to US$30 billion from US$175 billion high.
