TMTPOST -- Horizon Robotics said on Friday in a filing to the Hong Kong Stock Exchange that it would place about 639 million shares at HK$9.99 apiece, raising estimated net proceeds of HK$6.339 billion. The market reaction was swift: the stock slid more than 8% following the announcement.

The Chinese startup, often branded “China’s No. 1 Intelligent Driving Chip Stock,” has simultaneously achieved record fundraising and ballooning losses. Its ability to command capital markets contrasts sharply with its financial performance, underscoring both investor enthusiasm and the growing risks in China’s intelligent driving chip industry.

This marks the company’s third major capital raise in less than a year. Since listing in October 2024, Horizon has brought in HK$5.87 billion via its IPO, HK$4.67 billion through a June placement, and now HK$6.34 billion in its latest round—nearly RMB 15.5 billion in total.

The placement price was set at a 5.75% discount to the September 25 close. Analysts noted that compared with its June placement, Horizon raised more money this time at a smaller discount, signaling stronger investor appetite but also prompting skepticism in online investor forums.

According to the company, the fresh capital will support overseas expansion, accelerate its domestic footprint, bolster R&D, fuel investments in emerging segments like Robotaxi, and fund strategic partnerships across the supply chain.

Industry analysts interpret the move as a sign of urgency. Founder Yu Kai has laid out an ambitious roadmap: cars “hands-free in three years, eyes-free in five years, and drive-anywhere in 10 years.” To meet that vision, Horizon must commercialize at scale before global giants like Tesla and Nvidia consolidate their technological lead.

Fundraising strength aside, Horizon continues to bleed cash.

In the first half of 2025, the company reported revenue of RMB 1.567 billion, up 67.6% year-on-year. Yet losses widened to RMB 5.233 billion, compared with RMB 5.098 billion a year earlier.

A bright spot lies in Horizon’s flagship Journey series of in-vehicle intelligent chips. By August, cumulative shipments surpassed 10 million units—the first time a Chinese firm crossed that milestone. In H1 2025 alone, shipments hit 1.98 million, doubling year-on-year.

Crucially, mid- to high-level products are now driving growth. Shipments of the Journey 6 series—which support advanced features like highway and urban Navigate-on-Autopilot (NOA)—reached nearly 980,000 units in the first half, a sixfold jump. These chips contributed over 80% of segment revenue.

That product mix shift also lifted Horizon’s average revenue per vehicle by 70%. Yu Kai has said the cost of vehicles equipped with urban assisted driving will fall to around RMB 150,000, accelerating mass-market adoption.

Partnerships remain broad: Horizon works with 27 automakers and over 300 vehicle models, including Volkswagen and BYD. According to Gaogong Intelligent Vehicle, Horizon holds a 33.97% market share in China’s intelligent driving computing solutions for domestic passenger cars—meaning one in three vehicles runs on its chips.

Behind the impressive shipment figures, however, lies a vulnerability: customer concentration.

From 2021 to H1 2024, the top five customers contributed between 53% and 78% of total revenue. In H1 2025, they still accounted for 52.5%, with the largest alone representing nearly 20%.

The bigger concern is that many of those automakers—NIO, XPeng, BYD—are now developing their own chips. Horizon could face a “backup supplier” risk, where it becomes a secondary option once in-house solutions mature.

That prospect threatens Horizon’s long-term growth narrative, raising questions about whether its capital-heavy strategy can withstand customer defections.

The backdrop is an escalating global battle over computing power.

Research firm Sigmaintell forecasts the global intelligent driving SoC market will expand from $5 billion in 2024 to $7.6 billion in 2025. CITIC Securities projects that mid- to high-level intelligent driving penetration in China will double by then, creating a RMB 35 billion incremental market.

Policy support also plays a role. China’s Ministry of Industry and Information Technology (MIIT) has set a target to boost localization of auto chips to 20% by 2025. Dongfeng Motor has pledged to raise its own localization rate to 60% by then.

But competition is intensifying. Nvidia, the global leader, began mass production of its Thor chip in August 2025, though delays and reduced specifications have dented its edge. Domestically, Huawei, Horizon, SemiDrive, and others are racing to catch up.

Market share data from 2024 shows Nvidia on top in China with 38.6%, followed by Tesla (23.4%), Huawei (17.2%), and Horizon (10.7%). Meanwhile, local automakers are deploying their own designs: NIO’s Shenji NX9031, XPeng’s Turing series, and SemiDrive’s new solutions are already rivaling Nvidia’s Orin X.

Horizon’s strategy is shifting from simply “selling chips” to offering integrated software and hardware.

In 2021, hardware sales made up 44.6% of revenue, compared with 27.9% in 2024. Software services grew from 43.3% to 69.1% over the same period. The transition reflects automakers’ push to cut hardware costs and Horizon’s effort to create more stable recurring revenue streams.

Robotaxi represents another bet. UBS estimates China’s Robotaxi market could reach $183 billion by the late 2030s, with 4 million vehicles in service. On September 11, Horizon signed a strategic deal with mobility firm Hello Inc. to co-develop low-cost, highly reliable technologies tailored for Robotaxi operations.

The wager is risky: the Robotaxi sector itself remains unprofitable, with many pilot programs still heavily subsidized. But if Horizon can secure a foothold early, it could lock in long-term demand.

Horizon Robotics stands at a crossroads. Its strong fundraising record—nearly RMB 15.5 billion in one year—demonstrates market confidence in both its technology and vision. Its Journey chips are gaining traction, and the company commands a significant share in China’s fast-growing intelligent driving market.

Yet the financials tell another story: widening losses, customer concentration risks, and rising competition from both foreign giants and in-house automaker solutions.

How long investors will tolerate the imbalance between revenue growth and mounting red ink remains an open question. For now, the capital markets are still betting on Yu Kai’s bold roadmap. But in the high-stakes race to power the world’s autonomous future, patience—like computing power—may prove to be the scarcest resource of all.