The hot concept of self-driving in the capital markets is hitting the headlines again. The self-driving unicorn Pony.ai, which is deeply cultivating first-tier cities in China, has officially started its march towards listing on the US stock market.

On Thursday, October 17, Eastern Time, Pony.ai Inc. submitted its prospectus to the U.S. Securities and Exchange Commission (SEC), applying for its American Depositary Shares to be listed on Nasdaq under the stock symbol PONY. Goldman Sachs, Bank of America, Deutsche Bank, and HTSC will act as the lead underwriters for Pony.ai's initial public offering (IPO).

Pony.ai plans to use the funds raised in this IPO primarily for executing market strategies, scaling the commercialization of the company's self-driving technology in key target markets; continuing to invest in the research and development of the company's self-driving technology; general corporate purposes, as well as for potential strategic investments and acquisitions to enhance the company's technological capabilities and overall ecosystem.

In April this year, the China Securities Regulatory Commission issued a notice for Pony.ai's overseas issuance and listing, indicating that Pony.ai plans to issue no more than 98.1495 million common shares and list in the United States. Since its establishment, Pony.ai has gone through nine rounds of financing, with investors including Sequoia China, IDG Capital, Warburg Pincus, Toyota Motor, Kunlun Tech, etc. After the latest round of Series D financing completed in October last year, the company's valuation has reached $8.5 billion.

This Thursday, Pony.ai did not disclose the planned fundraising amount in the prospectus. Those who previously invested in another self-driving technology company, WeRide, are considering participating in this IPO investment.

Coincidentally, just last week, Guangzhou Automobile Group announced its agreement for its wholly-owned subsidiary, GAC Capital, to invest $27 million (approximately RMB 0.191 billion) in Pony.ai to deepen business synergy and promote the company's development in the field of self-driving.

Pony.ai became the first to obtain regulatory approval needed for public Robotaxi services in the four first-tier cities in China.

Xiaoma Zhixing was founded in 2016 by Peng Jun and Lou Tiancheng, former chief architect of Baidu's autonomous driving business unit, and has established research and development centers in Silicon Valley, Beijing, Shanghai, Guangzhou and other places. According to its official website, after years of research and development accumulation, the company focuses on the 'virtual driver' technology, establishing three core businesses: autonomous driving ride-hailing services, autonomous driving trucks, and intelligent driving for passenger vehicles.

In its prospectus, Xiaoma Zhixing claims to be the "global leader in achieving large-scale commercialization of autonomous driving. On the public roads of major Chinese cities, Xiaoma Zhixing has achieved what was once only described in science fiction novels - creating cars that can drive autonomously."

Xiaoma Zhixing also mentions its main business of autonomous driving taxi ride-hailing services (Robotaxi), stating "Now, commuting in an unmanned Xiaoma Zhixing Robotaxi is not only a showcase of groundbreaking technology, but also a part of the daily life of many residents in these (major Chinese cities) communities. Just as intuitive as taking a traditional taxi, riding in a Xiaoma Zhixing Robotaxi provides a revolutionary travel option for everyone, making our streets safer, more eco-friendly, and changing the way the world travels."

Three months before applying for listing on the US stock market, Xiaoma Zhixing obtained a demonstration application permit for intelligent connected vehicles without human drivers from Shanghai in early July this year, with an operating scope covering 205 kilometers of routes in Shanghai's central city area of Pudong. With this, Xiaoma Zhixing's autonomous driverless passenger travel service officially covers the four first-tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen.

Xiaoma Zhixing also mentioned this achievement in the prospectus. The prospectus cites information from the business consulting firm Frost & Sullivan, stating that Xiaoma Zhixing is one of the first companies in China to obtain permits for operating driverless Robotaxi services in all four first-tier cities, and it is the only autonomous driving technology company that has obtained all regulatory permits required to provide Robotaxi services to the public in these first-tier cities.

The prospectus states that Xiaoma Zhixing currently operates over 250 Robotaxi vehicles, with a cumulative total autonomous driving mileage exceeding 33.5 million kilometers, including over 3.9 million kilometers of driverless mileage.

In the first half of this year, revenue doubled, and net loss narrowed by 25.6%.

The prospectus shows that this year, Pony.ai's operating income accelerated growth, operating expenses decreased slightly, and losses continued to shrink by double digits.

In the full year of 2023, Pony.ai's operating income was 71.899 million US dollars, a 5.1% year-on-year increase from 2022. As of the first half of this year ending on June 30, 2024, revenue doubled year-on-year to reach 24.72 million US dollars. In 2023, operating expenses were about 0.16 billion US dollars, a 21% decrease from about 0.2 billion US dollars in 2022. In the first half of this year, operating expenses were 74.304 million US dollars, a 4.4% decrease year-on-year.

In 2023, Pony.ai's net loss was approximately 0.125 billion US dollars, a 15.5% year-on-year decrease. In the first half of this year, the net loss was 51.775 million US dollars, a 25.6% decrease year-on-year.

The main reason for Chinese autonomous driving companies to go global is for the 'education market', not to compete for market share.

When responding to the IPO for the first time in August this year, Pony.ai's CEO, James Peng, told Southern Finance that research and development companies actually need capital support. Financing is a win-win situation with the capital market. With financial support, companies can do better, create more excellent products, attract more investors, and receive more support. This is a positive cycle. Pony.ai's IPO has obtained some approvals and processes, and the entire process is related to the capital environment.

For Chinese self-driving companies to explore overseas markets, Peng Jun believes that it is more of an "educational market" process rather than just a competition for market share. During the process of Chinese technology going global, overseas customers will also come to China for research. "When they get in our cars, experience our technology, they will have a deeper understanding of our maturity, scalability, and safety."