China’s EV upstarts are building their own investment powerhouses

In China, the investment game for automotive startups is getting more competitive with established venture capital firms joining the competition. The country's leading electric car-making upstarts backed two mobility-focused funds that recently closed new rounds.

EV maker Xpeng is the anchor investor in the $200 million maiden fund of Rockets Capital, a brand new venture- and growth-stage investment vehicle. IDG Capital is one of the big institutional investors in China. The fund looks for opportunities in the auto industry value chain, clean energy and other areas.

The Eve ONE Fund II is oversubscribed by $400 million. There are many investors from all over the world, from funds of funds, family offices, pension funds to foundations.

William Li, the founder of Xpeng, started Nio Capital, which is not related to the carmaker. The firm focuses on auto, technology and energy sectors in its fund.

Rockets Capital makes its connection to its investor more public. It operates as an independent investment firm and will leverage Xpeng's industry expertise and resources.

Nio Capital was founded in 2016 and has a head start in the investment space. Momenta and Pony.ai are two of its more notable deals in China.

Nio Capital has built a fortress around itself with up-and-coming players in the auto industry. Now is the time to see how Rockets Capital and its patron Xpeng play catch-up and what alliance they can forge to remake the market.