GM-Backed Momenta's $9 Billion IPO Gets a Reality Check As Chinese Self-Driving Startup's Shares Slip in Hong Kong Debut

General Motors Co. (NYSE:GM)-backed Momenta Global Ltd.’s Hong Kong initial public offering valued the Chinese autonomous driving company at about $9 billion, but its muted trading debut on Wednesday showed investors remain cautious about how quickly the self-driving industry can turn promise into profit.

Momenta Debut Tests Hong Kong Tech Demand

Momenta raised $751 million in the offering, one of several technology listings testing investor demand in Hong Kong. Its shares closed 2.11% below the IPO price of 302 Hong Kong dollars, or about $38.51, after opening into a market crowded with new listings.

The subdued start contrasted with heavy demand during the offering. The retail tranche was 413.6 times oversubscribed, while the institutional portion was 20.3 times covered.

Momenta’s debut would serve as a test of investor appetite for Chinese artificial intelligence and advanced technology companies as Hong Kong faces a record wave of lock-up expirations after a strong first half for new listings.

Profitability Concerns Weigh On Self-Driving Firms

The caution reflects a tougher backdrop for autonomous driving companies. Pony AI (NASDAQ:PONY) and WeRide Inc. (NASDAQ:WRD), both previously listed in the U.S., went public in Hong Kong last year. Reuters reported at the time that both fell sharply on debut, highlighting investor anxiety over commercialization timelines.

Momenta, like many of its peers, remains unprofitable. Its revenue rose about 83% last year, but its net loss widened to 3.46 billion yuan (approximately $509 million), up from 3.21 billion yuan (approximately $472.5 million).

The company plans to use about 60% of its IPO proceeds for research and development of autonomous driving technology and another 20% for commercializing and deploying robotaxi services.

Automaker Partnerships Give Momenta Global Reach

Founded in 2016 by former Microsoft Corp. (NASDAQ:MSFT) researcher Cao Xudong, Momenta sells driver-assistance software to automakers. The systems help vehicles steer, brake, change lanes and park, but drivers must remain ready to take control.

Momenta said in its prospectus that vehicles using its software totaled more than 680,000 by the end of 2025. Its customers and partners include Toyota Motor Corp. (NYSE:TM), Mercedes-Benz Group AG (OTC:MBGAF) (OTC:MBGYY), SAIC Motor, GM, BYD Co. Ltd. (OTC:BYDDY) (OTC:BYDDF) and Audi.

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