PEdaily has exclusively learned that Leekr Technology, a provider of intelligent chassis system solutions, has completed its Series C financing round, raising over 1 billion RMB. The list of investors is impressive:
This round was jointly led by Hangzhou Fuchun Bay New City Development Fund, Saize Capital, Hefei Construction Investment, Hefei Baohe Navigation Fund, Baohe Science and Innovation Fund, Guohai Innovation Capital, Chery Group's
Ruicheng Fund, Huaying Investment, Guxin Investment, and Shengrui Duxing.
Founded in 2021, Leekr Technology has raised nearly 2 billion RMB in just three years, with a long list of investors, leaving many in awe.
This success is only part of a bigger picture. As the second half of the new energy vehicle (NEV) era unfolds, the ability to integrate chassis systems is no longer an optional benefit, but a key factor determining the fate of products and even entire companies.
The Second Half of the NEV Era
A Dark Horse Emerges in the Intelligent Chassis Sector
Why is the intelligent chassis sector so hot?
Let's look at some numbers: According to the latest data from the China Passenger Car Association (CPCA), in May 2024, China's NEV market saw retail sales of 804,000 units, a year-on-year increase of 38.5% and a month-on-month increase of 18.7%. Meanwhile, NEV penetration in China's domestic retail market reached 47.0% in May, up 14 percentage points from the same period last year.
At the same time, the installation rate of intelligent driving systems has also surged. According to the 2024 February Auto Intelligent Connectivity Insight Report jointly released by CPCA, in January-February this year, the installation rate of L2-level and above driver assistance functions in NEV passenger cars reached 62.5%. It is undeniable that intelligence has become the focus of competition in the second half of the NEV race.
As one of the traditional three major automotive components, the chassis is now being given more capabilities and requirements. The intelligent chassis has emerged at the intersection of the two major trends of electrification and intelligent driving.
Compared to traditional automotive chassis, intelligent chassis expands the role of the chassis, allowing it to provide high-precision control, perception of status, and fast responsiveness, becoming a necessary component for the safe operation of NEVs. This also means that the intelligent chassis is the key to achieving advanced autonomous driving and is a critical "chokepoint" technology that the automotive industry must conquer to ensure autonomy and control.
With the shift from fuel vehicles to NEVs, Leekr Technology was officially established in 2021 by a group of veterans who had been deeply involved in the core chassis field for decades. By using integrated wire-controlled braking technology as a breakthrough, they rapidly developed products and achieved large-scale mass production, earning valuable first-mover advantages and securing ample resources to develop safe, efficient, and intelligent complete wire-controlled chassis solutions for automakers.
The wire-controlled braking system is one of the core components of the intelligent chassis system. It completely replaces traditional mechanical transmission mechanisms and braking circuits with electronic signals to transmit braking commands. Wire-controlled braking systems offer faster braking response and more precise adjustments, serving as a key element in ensuring the safety of autonomous driving. Additionally, as NEVs often face range anxiety, this system helps vehicles achieve efficient energy recovery, significantly enhancing the driving range of NEVs, and has become a standard feature in new energy vehicles.
Although Leekr Technology entered the field relatively late, its development has been rapid. The company was the first in the industry to achieve mass production of the fully decoupled hydraulic braking product DHB-LK® (Two-box) and later scaled up mass production of the integrated intelligent braking system IHB-LK® (One-box). The latter integrates functions needed by fuel vehicles, such as braking assistance, vehicle stability control, advanced autonomous driving control, and energy recovery-critical for NEVs. It offers a higher level of integration, lower costs, and faster braking speed in emergency situations, earning it the title of "One-box" in the industry.
Leekr Technology adopted a "focused power" product strategy to quickly achieve mass production and vehicle installation of the One-box product, becoming the first domestic technology company to mass-produce an integrated intelligent braking product. This product significantly enhances driving range while lowering costs, leading to multiple orders from top NEV automakers and strategic investments from automakers.
As founder Hui Zhifeng previously said, "We must embrace change in this constantly evolving market, where opportunities come and go quickly, and strive to seize more opportunities to build a 'moat' for our products and gain a stronger competitive edge."
Nearly 2 Billion RMB Raised in Three Years
A Luxurious List of Investors
Going back to May 2022, Leekr Technology announced the completion of its Series A and A+ financing rounds, raising nearly 200 million RMB. The Series A round was co-led by Yuanjing Capital and Sinovation Ventures, with follow-up investments from the Shanghai Free Trade Zone Fund and its Lingang New Area Science and Technology Fund, and Jiuhai Ventures. The A+ round was led by Harvest Investment, with participation from Yiqi Leaguer, and additional investments from Yuanjing Capital, the Shanghai Free Trade Zone Fund, and its Lingang New Area Science and Technology Fund.
A year later, Leekr Technology completed its Series B financing round, raising 400 million RMB, co-led by China Science & Technology Investment Management Co., Ltd. (an investment institution associated with the Chinese Academy of Sciences) and Leaguer Capital. Nezha Capital, BAIC Industry Investment, and Yiqi Leaguer also made strategic investments, with follow-up investments from Limin Ventures, Yanying Investment, Guangzhou Science City Ventures, and Longding Investment. Existing shareholders Yuanjing Capital, the Shanghai Free Trade Zone Fund, Harvest Investment, and Jiuhai Ventures continued to increase their investments in multiple rounds.
With the addition of ten investors in this Series C round, Leekr Technology now boasts a star-studded roster of institutional shareholders. Upon closer inspection, it's clear that most of Leekr Technology's investors are active participants in the NEV industry, with deep industry backgrounds.
Among the investors in this Series C round, Hefei Construction Investment deserves special mention. After helping BOE Technology transform, Hefei Construction Investment raised 7 billion RMB in 2020 in partnership with three levels of state-owned platforms to help NIO out of its darkest hour, earning Hefei the reputation of "the most successful venture capital city."
Also notable is newcomer Guxin Investment, which participated in Nezha Auto's Series D+ financing round in 2021. Yuanjing Capital, which has invested in Leekr Technology's Series A, A+, and B rounds, previously participated in Li Auto's Series A financing in 2016 and continued to invest in subsequent rounds.
In addition, Leekr Technology has attracted the interest of numerous major automakers. Chery, FAW, BAIC, and NETA's related industry funds are also among the shareholders.
Why have so many leading institutions and automakers turned their attention to the upstream supply chain and invested in Leekr Technology? The answer is simple: in the early stages, it's all about the product, but long-term success depends on mass production. For intelligent chassis companies to stand out, they need strong mass production performance, in line with the development path of NEVs.
Public information shows that Leekr Technology's IHB-LK® (One-box) product has been designated for more than 30 vehicle models across 10 domestic automakers, with development on multiple models underway. Leekr has also established cooperative development with BYD and started mass production for top automakers such as Chery and Seres. Seres has joined the ranks of leading new energy companies, Chery has been China's top auto exporter for five consecutive months, and BYD continues to dominate the domestic NEV sales market. For these companies to maintain high growth, they need a healthy supply chain, providing Leekr Technology with a unique opportunity to enter the market.
It's worth noting that wire-controlled braking products are critical to vehicle safety. To become part of an automaker's supply chain, these products must meet the highest functional safety requirements and ASPICE standards. They must undergo extensive real-world testing, including two summer trials and one winter trial, as well as third-party inspections and over 100,000 kilometers of road testing. Additionally, before mass production, automakers must list the product in the Ministry of Industry and Information Technology's (MIIT) "Road Motor Vehicle Manufacturing Enterprise and Product Information" announcement, meaning the product must pass rigorous evaluations alongside batteries and engines. All of this requires significant development costs, a long development cycle of 1 to 3 years, and high standards for a tech company's design, development, and mass production capabilities.
Thus, gaining the recognition of major automakers proves Leekr Technology's mass production strength, forming one of its deepest "moats."
A Historic Opportunity for Supply Chain Restructuring
Looking back, due to high technical barriers, intelligent chassis systems were long dominated by foreign suppliers, with giants like Bosch and Continental once capturing over 90% of the domestic wire-controlled chassis market. Additionally, companies such as Korea's Mando, Japan's Denso, and the U.S.'s Delphi emerged in parallel with their respective national auto industries.
However, the sudden outbreak of the COVID-19 pandemic in 2020 disrupted global supply chains, leaving domestic automakers facing a shortage of parts. This gave local suppliers fertile ground to grow, particularly with the rapid development of
NEVs and intelligent driving technologies in China, creating a historic opportunity for the restructuring of the automotive supply chain.
A typical case can be seen during the pandemic when BYD's subsidiary, Fudi Power, successfully developed a One-box (integrated solution) wire-controlled braking system, significantly improving BYD's chassis parts supply situation and securing the supply of key components. This has inspired other domestic automakers to take action, either by establishing subsidiaries or directly investing in expanding their ecosystems.
On the other hand, the deep joint development between intelligent chassis tech companies and automakers allows for greater software reusability and ease of migration, increasing development efficiency. Once mass production begins, domestic suppliers can offer automakers a cost advantage and faster iteration, making cost control more ideal.
Among the various solutions, the highly integrated, high-performance One-box system is gradually becoming the market's mainstream choice. According to GaoGong Intelligent Automobile Research Institute, in 2023, 7.95 million new passenger cars equipped with wire-controlled braking systems (One-box or Two-box) were delivered in the Chinese market, with nearly 5 million of those featuring One-box systems. The reasons behind this include One-box systems' higher integration with ESC, lower cost, better energy recovery efficiency, and advantages in size and weight.
Domestic brands have become the main contributors to the market, accounting for more than 55% of new vehicles equipped with wire-controlled braking systems. BYD has already implemented One-box systems across its entire range of vehicles. Industry expectations predict that the front-loading rate of wire-controlled braking systems will exceed 50% by 2024, closely tied to the penetration rate of NEVs.
According to data from Gasgoo Auto, in the first quarter of 2024, Leekr Technology became the only tech company to rank among the top seven manufacturers in terms of wire-controlled braking (One-box) installations, with the rest being foreign giants and companies affiliated with domestic automakers. This indicates that the domestic market for wire-controlled braking systems is becoming more defined, leaving limited time for other players in this field.
Standing at the present moment, the historical wheels of the NEV era continue to roll forward. Although the technological breakthroughs along the way are filled with hardships and uncertainties, no one can predict when the next turning point will come.
But we know it will.