Qihoo 360 CEO: Partial Transfer of Hozon Auto Equity Not Due to Lack of Funds

Zhou Hongyi, the co-founder and CEO of internet security firm Qihoo 360, responded on the evening of July 11 to the issue of “transferring the 1 billion-yuan capital increase right of Hozon Auto” in an interview with Sina Tech.

Zhou said that the round-D financing of Hozon Auto was divided into two rounds, of which Qihoo 360 invested 1.9 billion yuan ($282 million) in the D1 round and had the right to increase capital by 1 billion yuan. According to Zhou, “If we continue to invest 1 billion yuan, we can further increase our shares. However, considering that the shareholder composition of Hozon Auto is very diverse, in order to enhance the voice of its founding team and support the company, we transferred the D2-round capital increase free of charge. The 1 billion-yuan capital increase right was given to the fund behind the founding team, and we became a concerted actor.” He stated that Qihoo 360 has nearly 20 billion yuan in cash, and if Hozon Auto has no money, he will not hesitate to make additional investments.

On the evening of June 26, Qihoo 360 announced that it would transfer its 3.532% equity of Hozon Auto at the consideration of 0 yuan. After the completion of this equity transfer, it still holds 11.4266% equity of Hozon Auto. On October 19 last year, it disclosed new external investment, planning to inject 2.9 billion yuan in Hozon Auto with its own funds. As of June this year, it still had an unpaid investment of 1 billion yuan.

SEE ALSO: Hozon Auto Completes Financing, Plans to List This Year

On the morning of June 27, Hozon Auto announced the transfer of shares by Qihoo 360. The carmaker stated, “The fund of part of the shares transferred by Qihoo 360 is conducive to improving the corporate governance structure and the control rights of the management team. The company will quickly start its share restructuring.”

The IPO process of Hozon Auto is still unclear, as is Qihoo 360’s “withdrawal,” which has attracted the attention of the market and web users.

In 2021, the sales volume of Hozon Auto totaled 69,674 vehicles, an increase of 361.7% compared with 2020. In May 2022, the sales volume exceeded 10,000, and the sales volume in the first five months was 49,974. Among new leading car companies, its delivery volume was second only to XPeng Motors.