360 to invest RMB2.9 billion to be second-largest shareholder of HOZON Auto

Beijing (Gasgoo)- China’s cybersecurity service provider, 360 Security Technology Inc. (360), released a notice stating the company’s plan to invest RMB2.9 billion ($451 million) in HOZON Auto, the Chinese startup owning the EV brand NETA. 

The NETA S; photo credit: NETA 

If the investment goes through, 360 will own 16.594% of HOZON Auto’s stake as its second-largest shareholder after the latter’s management team.

In fact, this is not the first time 360 announced investments in the auto startup. On April 26 this year, 360 led HOZON Auto’s RMB3 billion ($466.57 million) worth of D-round financing. Later, on May 11, at the company’s media conference, founder and president of 360, Zhou Hongyi declared it would invest in HOZON Auto strategically as the automaker’s second-largest shareholder.

Zhou Hongyi said intelligent vehicles would be the largest intelligent terminal after personal-computers and smartphones, making V2X (vehicle to everything) the next opportunity after mobile network. As a cybersecurity service provider, vehicle network and V2X security will be the next focal points of the company.

Photo credit: 360 Security Technology Inc.

360 made another move regarding the investment plan on September 17, as HOZON Auto added Chengdu Hongjing Technology CO., Ltd. to its list of shareholders (details not disclosed). The said company is none other than the wholly-owned subsidiary of 360.

The newly announced investment will be divided into two dependent capital increasing steps. First, the said subsidiary will acquire the unpaid capital increase right without consideration from one of HOZON Auto’s shareholders, Nanning Minsheng New Energy Industry Investment Partnership (Limited Partnership), and invest RMB900 million ($140 million) in HOZON Auto for 10.6944% of the latter’s stake. 

Then, 360’s another two wholly-owned subsidiaries, namely Tianjin Qirui Tiancheng Equity Investment Center (Limited Partnership) and San Liu Ling Private Equity Management Co., Ltd., will participate in the auto startup’s D1-round of financing with RMB2 billion ($311 million) of investments. 

Additionally, HOZON Auto was valued at RMB22 billion ($3.42 billion) before its D1-round investments.