Smart Automobile Co, a joint venture between Germany’s Mercedes-Benz and China’s biggest private carmaker Zhejiang Geely Holding Group Co., is considering raising funds as part of its plans to promote the minicar as an all-electric brand, according to people familiar with the matter.
Smart could seek about $500 million to $1 billion in fresh funds by selling a minority stake in the venture, the people said, asking not to be identified because the matter is private.
A private fundraising deal for Smart, which is currently valued at roughly $5 billion, could attract interest from other automakers and strategic investment funds, the people said.
Considerations are preliminary and details such as the size of the round could change based on demand, the people said.
The joint venture will use the proceeds to boost its brand as an electric-vehicle maker, the people said. Smart’s global lineup will become all-electric, after the brand already made the switch in North America.
Representatives for Smart and Mercedes-Benz declined to comment.
Mercedes-Benz and Geely, owned by billionaire Li Shufu, formally announced the 5.4 billion-yuan ($849 million) Smart joint-venture, based in Hangzhou Bay, Ningbo, in early 2020.
