ECARX plans to announce partnerships with two new global automaker clients in the next six months, according to Shen. The electrification of cars will be an opportunity for ECARX and contribute about 15 percent of this year’s revenue, he said.
Jun Hong Heng, chairman of COVA Acquisition, said ECARX is well positioned for the next decade. The company could raise additional funding when there’s extra interest, according to Heng.
“It struck me that this is a very unique opportunity, with the product and the substantial revenue that ECARX has, which is very rare for autotech companies,” he said in an interview.
The merger is expected to close in the fourth quarter, according to Thursday’s statement. UBS Group AG and Morgan Stanley advised ECARX on the deal, while Cantor Fitzgerald acted as capital markets adviser to COVA Acquisition.
COVA Acquisition is led by Heng, founder of San Francisco-based Crescent Cove Advisors, which backs high-growth technology, media and telecommunications ventures in the U.S. and Southeast Asia.
Crescent Cove was an early investor in Luminar, a driverless-car startup founded by entrepreneur Austin Russell. Luminar went public through a SPAC deal in 2020.
Russell, Luminar’s CEO, told Reuters that the California-based startup will be investing $15 million in ECARX in a bid to break into the Chinese car market and tap customers such as Geely.
“As things are successful, I don’t think it would be surprising if we ultimately collaborate even more, invest even more, as this partnership scales,” he told Reuters.
A blank-check firm, or a special purpose acquisition company (SPAC), is a listed shell entity that uses the money raised in its IPO to merge with a private company, taking it public in the process.
Chinese listings in the U.S. have been frozen for months, as Beijing and U.S. regulators have been locked in a dispute over the latter’s demand for complete access to the books of U.S-listed Chinese companies.
Reuters and Bloomberg contributed to this report.