Xpeng said it plans to carve out its robotics business into Dogotix as a standalone operation and bring in about $900 million in funding commitments, according to a Hong Kong Stock Exchange filing. The arrangement is designed to give the capital-intensive robotics unit its own valuation and financing channels while allowing Xpeng to keep control of the business.
Under the conditional share purchase agreement, Dogotix is assigned a pre-money valuation of $5 billion. If the equity incentive plan is fully utilized, and excluding any additional investment and warrant exercises, the implied post-transaction valuation would be about $6.3 billion. Xpeng said external investors will contribute $600 million, while its wholly owned subsidiary Xpeng Dogotix will invest $200 million. Companies controlled by Xpeng chairman and CEO Xiaopeng He and co-president Brian Gu will invest a combined $100 million.
The financing is led by IDG Capital, with participation from Gaorong Ventures and strategic support from Tencent and Alibaba. Dogotix may also issue up to $15 million of preferred shares to another investor within four months of the agreement. In addition, companies controlled by He and Gu will receive warrants that could allow them to invest an extra $500 million in total, though that amount is not included in the current financing.
The transaction is still subject to closing conditions, and Xpeng said none had been satisfied or waived at the time of the announcement. Once the subscription and equity incentive plan take effect, Dogotix will no longer be a wholly owned subsidiary. Excluding additional investments, warrant exercises and certain incentive share transfers, Xpeng would hold about 81.97% of Dogotix. If all potential dilution factors are completed, Xpeng’s stake would fall to about 68.41%, while Dogotix would remain a controlled subsidiary and continue to be consolidated in Xpeng’s financial statements.
Xpeng plans to transfer robotics-related assets, intellectual property, personnel, systems and operational resources to Dogotix. The carve-out is expected to be completed within 18 months after external investors finish their first tranche of share subscriptions. Dogotix’s business covers the research, development, manufacturing, licensing and commercialization of general-purpose robots, including humanoid, bipedal, quadrupedal and tracked robots. The company said the proceeds will support expansion, capital spending, research and development, commercialization and working capital needs.
Unaudited management accounts showed Dogotix had net liabilities of about 447 million yuan as of March 31. The financing announcement came about an hour before Xpeng was scheduled to report second-quarter results, when it said vehicle deliveries rose to 103,295 units, up 64.8% from the first quarter.
Source: CnEVPost
