Alibaba Group Holding BABA and Baidu Inc BIDU are investing in a Chinese autonomous-driving company’s IPO, showing confidence in the growing market.
Horizon Robotics aims to raise nearly $700 million in its upcoming Hong Kong Stock Exchange listing, according to the Wall Street Journal.
Orders from institutional investors will be taken starting Wednesday.
Related: What’s Happening with US Listed Chinese Stocks?
Alibaba, Baidu, and state-owned Beijing Financial Holdings will buy over 30% of Horizon Robotics’ shares before the IPO.
The stock starts trading on October 24, and this support is expected to attract more investors.
About 70% of the funds raised will go to research and development, with the rest for marketing and operations.
Major banks like Goldman Sachs and Morgan Stanley are advising on the deal.
Recently, Alibaba’s cloud unit collaborated with Nvidia Corp NVDA to improve autonomous driving tech for Chinese electric vehicle makers.
They introduced a new model at the Apsara Conference that enhances in-car voice assistants using Alibaba Cloud’s and Nvidia’s technologies.
Alibaba and Baidu’s stocks have risen by 12%-22% in the past month.
Investors can access Alibaba through Avantis Emerging Markets Equity ETF AVEM and Global X AI & Technology ETF AIQ.
Current Stock Price: BABA is up 0.28% at $102.13 in premarket trading.
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