Billions of dollars in financing gone down the drain, the smart driving unicorn is on the verge of bankruptcy

According to Wandian Auto, the restructuring plan of smart driving solution provider Hodo Technology and GAC Group has encountered major changes. Hodo's capital chain is extremely tight, and it has disbanded most of its core departments and suspended its R&D activities. This situation has had a far-reaching impact on the company, making its future development full of uncertainty.

According to the China Enforcement Information Disclosure Network, HoloMed has been listed as a person subject to enforcement by the courts in Beijing Haidian, Jiangsu Suzhou and Guangzhou Huadu, involving an amount of nearly 750,000 yuan. These legal issues have exacerbated the company's financial difficulties and put it under even greater pressure to survive.

HoloMatic was founded in June 2017 and has received more than RMB 1 billion in financing from investors including IDG, Sequoia China, Guangdong Science and Technology Finance, GAC Group and NavInfo. The company's founder, Ni Kai, was a senior scientist at Baidu's Deep Learning Institute and was responsible for important technical work in Baidu's autonomous driving business. However, HoloMatic is now on the brink of life and death.

It is understood that Hodo held shareholder meetings in Beijing and Guangzhou on the restructuring of GAC, but the restructuring plan failed to gain support from Tongfang Investment and Guangdong Provincial State-owned Assets Yueke Finance. This failure resulted in the company being unable to pay July wages and arrears, and even unable to pay employees' provident funds.

On Monday (August 12), Hodo held an online meeting to inform employees to pack up and leave the office, and to apply for voluntary resignation. Some employees even moved the company's water dispenser because they failed to receive their unpaid wages. This incident highlights the company's deteriorating financial situation and employees' anxiety about the future.

Since the beginning of this year, Hodo has suspended the payment of some wages. It is understood that Ni Kai said at a staff meeting at the end of March that the company plans to reduce the number of employees to about 180 and hopes that GAC will continue to inject capital. However, although GAC's plan to reorganize Hodo was close to being achieved in July, it ultimately failed to be successfully implemented.

It is reported that GAC had planned to inject capital into Hodo and set up a new company, which would mainly provide intelligent driving solutions for GAC's brands. However, with the restructuring plan shelved, Hodo's prospects have become bleaker.

Faced with the difficulties, Ni Kai said in an internal letter that the company will maintain a minimal operating team, continue to look for new opportunities and maintain basic functions. He emphasized that no matter how difficult it is, Hodo cannot give up hope of survival. However, as most employees have lost confidence in the company's prospects, many have begun looking for new job opportunities.

NavInfo is one of the major investors of Hodo. Its 2023 annual report mentioned that the investment in Hodo Technology has been included in the "loss of other comprehensive income" of 18.96 million yuan. In addition, the accounts payable of 1.46 million yuan owed by Hodo to NavInfo are also expected to be unrecoverable.

Huayun Jindian (Zibo) Big Data Technology Co., Ltd. is a data annotation supplier of Hoduo. It has been cooperating with Hoduo since the second half of last year. Currently, Hoduo owes the company about 2 million yuan in payables. With the release of Hoduo's internal letter, Huayun Jindian has received active contact from Hoduo Business and was told to be mentally prepared to deal with possible financial risks.

HoloMatic used to be backed by GAC and was considered a benchmark for in-depth cooperation between automakers and suppliers. However, since 2022, HoloMatic's intelligent driving solutions have been implemented on multiple models of GAC, but HoloMatic's development has not been as expected in the delivery of projects to its major customer GAC. The number of employees in the company also increased rapidly around 2022, but ultimately failed to successfully cope with market challenges.

Earlier this year, Hodo sold its Chery project to another smart driving supplier, Zhixing Technology. The transaction was worth tens of millions of RMB, and Hodo's project team also joined Zhixing Technology. This sale further demonstrates the emergency measures taken by Hodo in the face of market competition and financial pressure.

In the process of rapid elimination and integration in the intelligent driving industry, some companies are rushing to go public through strong alliances or financing, such as the Fangchengbao Project jointly launched by BYD and Huawei, as well as companies such as Jianzhi Robotics, QINGZHOU Zhihang, and Momenta that have obtained new financing, or Momenta and WeRide that have submitted IPO prospectuses.

However, Hodo Technology has failed to successfully deliver to major customers and has fallen into serious trouble, and its future development remains full of uncertainty.