Xpeng Motors' IPO: Key Moments We Know About | Light Moments

On the evening of August 27, Beijing time, Xpeng Motors officially listed on the NYSE under the ticker "XPEV," with an IPO price of $15 per share and total proceeds of approximately $1.5 billion. By offering size and post-money valuation, this was the largest IPO ever for a pure-play electric vehicle company.

5Y Capital's connection with He Xiaopeng, chairman and CEO of Xpeng Motors, began in 2007. At that time, 5Y Capital became the first institutional investor in UCWeb, which He Xiaopeng co-founded with Yu Yongfu and Liang Jie. 5Y Capital continued to double down from the Series B through Series D rounds, until UCWeb was acquired by Alibaba in May 2013.

We believe the stories of exceptional entrepreneurs don't simply end.

In 2017, Xiaopeng stepped down from Alibaba and joined Xpeng Motors to embark on his second startup journey. That same year, 5Y Capital participated in Xpeng Motors' Series A+ round, and we went on to invest in five consecutive rounds.

Today, as Xpeng Motors successfully goes public, we celebrate for our old friend "Peng" of more than a decade — and we remain deeply curious.

Life is a series of multiple-choice questions at critical moments. Choosing to start a company. Choosing to start again. Choosing to believe. Choosing to persevere. Choosing to become who you are today. At which critical moments did Xiaopeng make which critical choices?

We caught Qin Liu between meetings and asked him to share a few lesser-known pivotal moments between him and Xiaopeng.

Qin Liu & Xiaopeng, photographed at the 2018 5Y Capital CEO Summit

A Super Product Manager 1.0's Insight, 2007

I met Xiaopeng in 2006 — fourteen years ago now.

His first startup was UCWeb, back when mobile internet was still the Symbian and GPRS narrowband era. UCWeb was the star product of that time. For example, many users read novels on their browsers. Because the chapters were long and required frequent page turns, other products made you wait ages for each flip — but UCWeb could turn pages instantly. The user experience was exhilarating.

I recognized then that Xiaopeng was a super product manager with genuine engineering depth, with exceptionally nuanced insight into user needs.

Early UCWeb interface

We Invest in People, 2015

During Xpeng Motors' angel round, Xiaopeng called me and asked if I wanted to invest. I asked him, "What's your role in this project?" He said he was an angel investor.

I thought then that smart vehicles represented an entirely new industry with enormous unknown challenges. Only a world-class entrepreneur could marginally improve the odds of success. If Xiaopeng wasn't all in, we wouldn't invest no matter how cheap the valuation.

The Most Relaxed Lunar New Year of the Next Decade, January 2017

That Spring Festival, our two families vacationed together overseas. One evening, we talked at length about family, life, and ideals. I remember vividly: we were on a boat watching the fireworks over Victoria Harbour. The fireworks were beautiful, but what left a deeper impression was Xiaopeng telling me he planned to leave Alibaba and personally take the helm at Xpeng Motors.

I watched the fireworks, then looked at Xiaopeng. I thought this might be the most carefree and relaxed Lunar New Year he would have for the next ten years.

Fireworks over Victoria Harbour, photographed during Spring Festival 2017

Starting a Company Is No Job for a Human, March 2017

After Xiaopeng made up his mind to start again, he came to Beijing one evening and we had another deep conversation, from past 8 p.m. until nearly midnight.

He said, "I've decided. I'm all in on my second startup. What advice do you have?" I asked him one question: "Are you really ready? Starting a company is no job for a human. Look at Lei Jun — how hard he works. And you're trying to cross over into something as difficult as building cars." I remember he was full of confidence, smiling as he said his second startup probably wouldn't be as exhausting as Lei Jun's.

I thought to myself: Buddy! Odds are you'll end up eating those words.

A Super Product Manager 2.0's Insight,

May 20, 2017

Xpeng Motors was undergoing a major redesign of the G3 — the first product Xiaopeng would helm full-time. The date was significant. Xiaopeng invited me to experience it firsthand. It was the first time I'd seen a "car" like that: just a front cabin, with staff demonstrating the features. What impressed me most wasn't the design or concept — it was the "automatic parking" function.

Smart vehicles are the first killer product of the AI era, just as smartphones were for the mobile internet era. And automatic parking is the first application that demonstrates a car's intelligence. Xpeng Motors took this to the extreme. Today, Xpeng G3's automatic parking achieves an 85% comprehensive success rate, far exceeding Tesla's 19%. Weekly user penetration reaches 51%, far above competitors — meaning more than half of Xpeng's real users employ automatic parking each week, having made it a habit.

I thought: this was Xiaopeng's super product manager abilities, barely flexed. Find a user pain point and dominate it, creating differentiation and word-of-mouth. More importantly, behind this feature, Xiaopeng decided to abandon Mobileye's solution and independently complete multi-sensor fusion, establishing a strategic commitment to full-stack self-development of intelligent software. This was the critical step in translating his strategic vision into corporate strategy.

Foolishly Naive, Difficult and Precious, November 2018

We held 5Y Capital's CEO summit in Anji, Zhejiang. On stage, I asked Xiaopeng with a smile: "When you came to Beijing to talk with me, you said your second startup definitely wouldn't be as hard as Lei Jun's. How do you feel two years on?" With his trademark smile, he said he'd thought he could hire good people, implement good management, work six days a week, and have one day to rest, read, and think. But the reality was, every year he told himself next year would be better — deceiving himself a little — then kept working.

Though I posed this as a challenging question, I wasn't trying to tease him. I was thinking: For someone as financially free as Xiaopeng, what drives him to take on something as difficult as smart electric vehicles is precisely a kind of foolish, naive simplicity. And isn't that exactly the entrepreneurial quality we've always sought?

Qin Liu in conversation with Xiaopeng, photographed at the 2018 5Y Capital CEO Summit

Xpeng's Future: The Excitement Is Just Beginning,

August 27, 2020

Today Xpeng Motors lists on the NYSE, with many "Peng friends" present. As a "Peng friend" who has known Xiaopeng for over 15 years and never missed investing in either of his two startups — you ask what I feel, what I regret? My feeling is: In an investing career, encountering a rare entrepreneur like He Xiaopeng means you invest whenever he starts something. My regret is that even having participated in five consecutive rounds of Xpeng Motors, we still invested too little.

But I think: this is just the beginning for Xiaopeng...

Going forward, what user insights will Xiaopeng and his team continue to generate? Combining autonomous driving technology development and computing power advances, how will smart vehicles — this super-species of the AI era — evolve? What thoughtful features will Xpeng Motors bring to Chinese users? How will it free our hands, free our space? Everything remains to be anticipated.

Qin Liu & Xiaopeng, photographed at the Xpeng Motors IPO

In the AI era, smart vehicles represent a direction with enormous potential for technological and commercial paradigm shifts. Thinking from a 20-year time horizon about the present and future, Xpeng's potential and growth boundaries are far from realized. We believe in Xiaopeng. We believe in the power of this belief.

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5Y Capital is one of China's earliest venture capital firms focused on early-stage investment, currently managing both USD and RMB funds with assets under management totaling several billion dollars. Its limited partners include internationally renowned sovereign wealth funds, family offices, fund-of-funds, and university endowments.

Over nearly two decades of working together, the 5Y Capital team seeks out, supports, and inspires solitary entrepreneurs, sharing their exceptional vision and providing our insights, industry experience, and support across all operational aspects of entrepreneurship — from the spiritual to the practical.

5Y Capital's successful investments include Sohu (NASDAQ: SOHU), Trip.com Group (NASDAQ: CTRP), The9 (NASDAQ: NCTY), China Distance Education (NYSE: DL), Target Media (Focus Media (SZ: 002027)), Xunlei (NASDAQ: XNET), Phoenix New Media (NYSE: FENG), UCWeb (Alibaba (NYSE: BABA)), JOYY (NASDAQ: YY), Didi Dache (DiDi), Musical.ly (ByteDance), NYSE: ZEPP (NYSE: HMI), OneSmart International Education (NYSE: ONE), Huya (NYSE: HUYA), Xiaomi (HK: 0181), Viomi (NASDAQ: VIOT), Kingsoft Office (688111.SH), LIZHI (NASDAQ: LIZI.US), and Agora (NASDAQ: API). The portfolio also includes rapidly growing companies such as Kuaishou, WeDoctor, SenseTime, Xpeng Motors, Souche, Horizon Robotics, Bigo, Aihuishou, Xiaozhu, Mai Mai, Smartmi, Pony.AI, and Keep.