EHang Holdings, a China-based drone technology developer that counts corporates Lung Biotechnology and United Therapeutics Corporation as investors, has gone public in a $40m initial public offering in the US.
The company priced 3.2 million American Depositary Shares (ADSs), each representing two ordinary shares, at $12.50 each, at the foot of the $12.50-$14.50 range it had set. It floated on the Nasdaq Global Market.
EHang is developing autonomous drone technology for use in passenger transport, logistics and airborne media. It made a $6.7m net loss in the first nine months of this year from $9.4m in revenue.
About 50% of the IPO proceeds have been earmarked for the expansion of EHang’s manufacturing capacity. It intends to divide the rest between research and development and general corporate purposes.
GGV Capital, OFC, PreAngel and existing investors ZhenFund and Lebox Capital had provided $10m in series A funding for the company in 2014. The series A backers returned for a $36m series B round led by financial services provider Shanghai International Group’s GP Capital subsidiary in 2015.
Medical researcher Lung Biotechnology added $10m the following year before biotech company United Therapeutics Corporation and a vehicle called Dragon Chariot invested $9m in 2017, according to the IPO prospectus.
The only investors with stakes of 5% or higher in EHang are GGV Capital, which invested $1.4m in the offering while its 10.8% stake was cut to 10.5%, and ZhenFund, the owner of a 7.6% share that was diluted to 7.1%.
Bookrunner Morgan Stanley and co-managers Needham & Company, Tiger Brokers (NZ) and Prime Number Capital have the 30-day option to buy a further 480,000 ADSs, which would lift the size of the offering to $46m.
