Sunwoda reportedly to raise fresh funds before IPO in June

To meet the rapidly-increasing demand for EV batteries, Shenzhen-based unicorn Sunwoda reportedly is to raise money before its IPO plan expected in June.

Bloomberg quoted unnamed sources saying that Sunwoda Electric Vehicle Battery is working with an adviser and reached out to potential investors to raise as much as CNY4 billion (US$580 million) before filing for IPO as early as June, adding that the valuation, fundraising size, and IPO timeline may change.

Founded in 1997, Sunwoda, a battery supplier for Volvo, Xpeng, and Dongfeng Motor Group, entered EV battery manufacturing in 2008. Its EV battery business is relatively small compared with dominating CATL and BYD; however, Sunwoda has been on an investment spree since 2019 as the growth of battery demands outpaces supply.

According to SNE Research, Sunwoda's installed EV batteries increased by 253.2% from 2.6 GWh to 9.2 GWh, the highest growth among the top 10 global EV battery suppliers.

Sunwoda was listed on the SIX Swiss Exchange in November 2022, tapping into the Swiss capital market as the US's new rules make it harder for Chinese companies to list in the US.

Amid the Fed's rate hikes and the macroeconomic headwinds, the global capital market has been cooling down, leading to fewer and smaller fund-rasing rounds. Still, according to Forbes China's global unicorn report for 2022, released at the end of January, the new and clean energy was the sole industry that has seen a growth of unicorn numbers in the past year, with the largest fundraising activities in China coming from EV battery industries. Along with SFCC and Sinoma Lithium Battery Separator, Sunwoda, which raised CNY8 billion in March 2022, joined the ranks of unicorns in 2022.

Finance Sina reported that Sunwoda has benefited from the battery over-demand in the past few years when carmakers are looking for alternative sources for battery supplies. Besides, between 2019 and September 2022, Sunwoda announced combined investments worth CNY96.9 billion. The battery maker also announced an investment of CNY16.5 billion in a battery project in China's Yichun, viewed as Asia's lithium capital.

Source: SNE Research, February 2023