JOYNEXT, the smart vehicle solutions arm of Chinese automotive component supplier Joyson Electronics, has secured about 720 million yuan ($107 million) in a new funding round.

A private equity fund manager co-launched by Chinese state-owned investment firm SDIC and Shenzhen-based China Merchants Capital Investment (CMC) led the investment. Ningbo Gaofa Automotive, an automotive control systems developer; Shanghai-based IT and high-tech investor F&G Venture; and Cathay Capital’s 1.5-billion-yuan ($223 million) CarTech Fund, and other investors participated.

The completion of the financing came after Joyson Electronics disclosed in a filing to the Shanghai Stock Exchange (SSE) on July 3 that it had entered into an agreement with strategic investors to give JOYNEXT a pre-money valuation of 2.5 billion yuan ($372 million).

The filing showed that the SDIC-CMC fund agreed to inject 300 million yuan ($45 million) into the deal. Concurrently with the financing, Joyson Electronics had also invested 192 million euros ($226 million) in JOYNEXT.

Driven by the government’s regulatory support and heightened investment in R&D, the penetration rate of intelligent connected vehicles (ICVs) in China is poised to reach 43.8 per cent in 2020, compared with 35.3 per cent in 2019, according to a report released by London-based information provider IHS Markit in September 2020.

ICVs are said to be the next-generation of vehicles, which are equipped with in-car sensors, controllers, actuators, and other devices, as well as modern communication and network technologies to achieve effective and sustainable mobility, with capabilities of environment sensing, information exchange, intelligent planning, and automated control.

JOYNEXT was created in December 2019 between Joyson Electronics’ former smart vehicle unit, Joyson Preh Car Connect (JPCC), and the automotive division of TechniSat Digital GmbH. The Daun, Germany-based manufacturer of broadcast satellite receivers, TVs, and car navigation systems had sold its automotive division to Joyson Electronics in April 2016 for 180 million euros ($212 million).

JOYNEXT, which serves automakers like Volkswagen and Ford, provides connected infotainment solutions, advanced driver-assistance systems (ADAS), a smart connectivity gateway that offers real-time traffic, weather, navigation, real-time positioning, and other functions, as well as cloud services to support the aforementioned largely connected-vehicle-to-everything communication (V2X) and 5G-based offerings.

It is expected to mass-produce its first 5G-V2X intelligent connected vehicle product by 2021.

Dual-headquartered in Ningbo, China, and Dresden, Germany, the firm has a total of four R&D centres, one production base, and three offices around the world. The firm employs over 1,300 staff worldwide.

Contact editor Yang Ge (geyang@caixin.com)

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