Chinese electric-car startup Byton is close to clinching funding from investors led by state-owned China FAW Group Co., as it prepares to begin sales in the country’s burgeoning new-energy vehicle market, according to people familiar with the matter.
FAW, China’s third-largest automaker, is scheduled to sign an agreement within weeks to inject about $100 million into the car maker, the people said, asking not to be named because the matter is private. Byton aims to bring in a total of about $500 million from its latest round of fundraising, which would value the company at more than $2.5 billion, the people said.
The deal would help Byton, led by former BMW AG and Nissan Motor Co. managers, join the growing number of Chinese electric-car startups that have raised at least $1 billion as investors position themselves for what could be one of the biggest shifts in the automotive world since the dawn of cars. With China accounting for more than half of the world’s electric-vehicle sales in 2018, BloombergNEF estimates investors poured nearly $8 billion to fund Chinese EV startups, led by U.S.-listed NIO Inc., last year.
A representative at Byton declined to comment and FAW Group had no immediate comment.
FAW was the lead investor for a previous $500 million financing round last year. The state-owned giant has been trying to revive Red Flag, the limousine brand known to have been favored by the late Chairman Mao Zedong. It made the investment last year as part of efforts to breathe new life into the Red Flag by cooperating with Byton in product development, manufacturing and sales.
Byton, which has a factory in Nanjing, plans to start selling its first model M-Byte in China at the end of the year. It will also target North America and Europe around mid-2020, Daniel Kirchert, one of Byton’s founders, said in an interview in January. The company will consider an initial public offering after new financing and production begins, Kirchert said then.