In June 2019, Zhuang Li's life took a major turn as she transitioned from NIO Inc. Vice President to become an entrepreneurial star. After leaving NIO Inc., Zhuang Li became CEO of automotive software startup Megatronix Technology in August 2019. Six years later, Megatronix Inc. has emerged, with 47-year-old Zhuang Li attempting to leverage capital markets to fuel her ambitions.
Megatronix Inc. is an automotive technology company committed to reshaping future mobility, focusing on developing and delivering AI-powered integrated domain controller solutions. The global trend toward intelligence, along with Zhuang Li and her husband Zhou Feng's status as a "power couple" in the venture capital circle, has attracted significant attention for Megatronix's Hong Kong IPO.
Under Zhuang Li's leadership, Megatronix has achieved remarkable growth in a short period, establishing a strong reputation in the industry with steadily rising revenues. Revenue broke through 100 million yuan in 2021 and reached 1.5 billion yuan in 2023. However, the company recorded cumulative losses exceeding 1 billion yuan over three consecutive years from 2022-2024, with continuous cash outflows from operating activities, presenting significant challenges for Zhuang Li's entrepreneurial journey.
Megatronix's core competitiveness lies in its self-developed AI domain controller solutions. This innovative technology requires continuous R&D investment to optimize product performance. Heavy investment in R&D serves as Megatronix's moat for growth. As of December 31, 2024, its R&D and execution teams comprised 78.0% of total employees.
Before the Hong Kong IPO, Megatronix's valuation in the latest funding round approached $1 billion.
**01 From NIO Vice President to Entrepreneurial Star**
Zhuang Li's growth trajectory is quite legendary, with her alumni network being particularly stellar, providing rich resources and connections for Megatronix's future development.
According to public information, Zhuang Li was born in 1978 and attended Chengdu No. 7 High School. She was admitted to Tsinghua University through direct admission based on her first-place national award in physics competitions. Her classmates include AI expert Li Feifei, Tencent COO Ren Yuxin, Baichuan Intelligence CEO Wang Xiaochuan, Bilibili Chairman Chen Rui, and Youdao CEO Zhou Feng.
Most notably, in 2005, NetEase founder Ding Lei sought Zhou Feng's help to solve spam email problems, which was facilitated through Zhuang Li's introduction. Zhuang Li and Zhou Feng evolved from campus romance to become a "power couple" in the venture capital circle. During Youdao's US IPO in 2019, Zhuang Li accompanied Zhou Feng to ring the opening bell at the New York Stock Exchange.
Zhuang Li herself is a genuinely accomplished professional. She holds a Ph.D. in Computer Science from UC Berkeley, as well as bachelor's and master's degrees from Tsinghua University. Before starting her business, Zhuang Li served as a senior researcher at Microsoft Research and held senior executive positions responsible for technology development at Yahoo and Cheetah Mobile.
According to public information, as the new energy vehicle industry emerged, Zhuang Li joined Li Bin's NIO Inc. (9866.HK) in July 2016 as Vice President of NIO Software Development (China). During her tenure at NIO, Zhuang Li led the development of intelligent cockpit and software platforms, with breakthrough innovations defining next-generation automotive experiences.
In 2018, market reports emerged that Zhuang Li participated in founding the connected vehicle company Megatronix (Beijing) Technology Co., Ltd., and helped connect business resources. In June 2019, Zhuang Li resigned from her position as NIO Vice President.
Regarding Zhuang Li's departure, NIO's official response stated that Zhuang Li left for personal reasons, with work fully transitioned smoothly and no impact on company operations. However, external opinions varied widely. Some believed that NIO Inc.'s prolonged losses made the prospects insufficiently bright for the ambitious Zhuang Li; others speculated that adjustments to NIO's software team prompted Zhuang Li to seek better opportunities; there were also claims that her departure was due to wanting to focus deeply on automotive software, which was inconsistent with NIO founder Li Bin's direction.
According to prospectus disclosures, in August 2018, Zhuang Li acquired 99.9993% equity in Megatronix Technology through AIZL Holdings Limited and MJXY Holdings Limited as founder and appointed director. AIZL and MJXY were backed by Zhuang Li and her established family trust.
After assuming the CEO role in August 2019, Zhuang Li devoted her full energy to entrepreneurship, focusing on "integrated intelligent cockpit + X domain controller solutions," spending six years bringing the company to capital market doors.
**02 Five Funding Rounds Raising $231 Million, Pre-IPO Valuation $930 Million**
The Tsinghua graduate's entrepreneurship, already well-known in venture capital circles, attracted numerous investors and industrial capital. Banyan Capital, Redpoint China, GGV Capital, Greater Bay Area Co-development Fund, Muhua Technology Innovation, Zhilu Capital, M31 Capital and other institutions rushed to participate, providing strong financial support for Megatronix's technology development, market expansion, and team building.
From January 2019 to December 2024, Megatronix completed five funding rounds, raising over $231 million, with valuations reaching $931 million, representing over 15-fold growth. Primary market financing became an important driver of Megatronix's rapid growth.
Under Zhuang Li's leadership, Megatronix simultaneously developed intelligent cockpit solutions and modular software architecture based on Qualcomm SA8155 chips while engaging with market customers to advance commercialization. As modular integrated software-hardware architecture achieved major breakthroughs, Series B funding saw Megatronix's valuation surge significantly to $320 million, while securing designations from Li Auto and Changan Shenlan.
In 2021, Megatronix secured $105 million in Series C funding from Transcendence Capital, Greater Bay Area Co-development Fund, GGV Capital, Redpoint China, Banyan Capital and other institutions. That year, its revenue scale exceeded 100 million yuan.
In 2022, with delivery volumes surpassing 100,000 units, Megatronix raised funds again, with existing shareholders GGV Capital and Ace Redpoint continuing participation, pushing valuations to $878 million.
However, in 2023, possibly due to strategic adjustments, Megatronix received no new funding throughout the year. Not until December 2024 did Megatronix, having decided to concentrate efforts on designated and more strategically aligned long-term customers, welcome Series D+ funding. However, this round's valuation growth was less pronounced than previous rounds, increasing only $53 million compared to the Series D round two years earlier.
This funding round encountered some minor complications. Prime Investment Limited, an originally agreed new shareholder, terminated investment due to internal restructuring. Existing shareholders including HIKE Capital L.P, Ace Redpoint entities, and GGV Capital collectively cashed out $278,200, with Suzhou Muhua as the transferee. Suzhou Muhua's ultimate beneficial owner is Zhang Yu, an original director of Megatronix.
Earlier, in September 2020, an individual investor completely exited after liquidation through a two-step process: Megatronix repurchased 36,027,312 shares; simultaneously, the investor transferred 3,972,688 shares to Zhuang Li. These shares were beneficially owned by the investor through AIZL Holdings Limited and MJXY Holdings Limited at the time, with total liquidation proceeds of $2.7 million, equivalent to approximately 18.41 million yuan at the September 15, 2020 exchange rate.
This investor remains mysterious, with the prospectus not disclosing identity, only noting contributions in recruiting early major customers.
Currently, Zhuang Li has turned attention to secondary markets. In 2025, she established Megatronix Inc. offshore, planning a Hong Kong Stock Exchange IPO. Pre-IPO, Megatronix is valued at $930 million, approximately 6.7 billion yuan. Based on her 44.85% shareholding, Zhuang Li's current net worth is approximately 3 billion yuan.
**03 Three-Year Cumulative Losses Exceed 1 Billion Yuan, Operating Cash Outflow 1.39 Billion Yuan**
For Megatronix, early-stage USD financing not only accelerated technology innovation but also secured a position in the competitive autonomous driving and connected vehicle markets. As of December 2024, Megatronix had 48 cooperative designated projects with 23 new designations. Cooperative customers include globally renowned automakers such as Nissan, Ford, Mazda, Chery, Changan, and Dongfeng.
Megatronix states in its prospectus: "In 2024, approximately one out of every ten new vehicles in China equipped with intelligent cockpit domain controller systems used our solutions." "We became the first third-party supplier to achieve mass production of integrated cockpit-parking solutions driven by a single chip."
Megatronix derives most revenue from selling integrated domain controller solutions to customers. During the reporting period (2022-2024), operating revenues were 388 million yuan, 1.513 billion yuan, and 1.42 billion yuan respectively. 2023 saw significant revenue growth, but 2024 revenue declined 6.2% year-over-year, mainly due to one-time impacts from Megatronix's long-term strategy implementation.
Simply put, Megatronix's long-term strategy involves terminating cooperation with some basic domain controller solution customers, shifting sales focus from basic to integrated domain controller solutions. Comparatively, integrated domain controller solutions command higher value due to superior technical content.
Excluding contributions from terminated relationships, Megatronix's revenues during the reporting period were 146 million yuan, 628 million yuan, and 1.359 billion yuan respectively. By 2024 Chinese integrated domain controller solution supplier installation volume, Megatronix ranked second with 9.3% market share.
The sales focus shift also changed Megatronix's gross profit structure, with gross profits of 73.559 million yuan, 183 million yuan, and 309 million yuan respectively. In 2024, despite year-over-year revenue decline, gross profit increased 68.87% year-over-year, with gross profit margin rising 9.7 percentage points.
However, persistently high operating costs, R&D expenses, and fair value impacts from valuation growth created profitability challenges. Net profits remained negative throughout the period, with net losses of 424 million yuan, 357 million yuan, and 291 million yuan respectively, showing continuous narrowing but cumulative losses of 1.072 billion yuan. Adjusted net losses were 139 million yuan, 208 million yuan, and 176 million yuan.
Simultaneously, operating activities generated continuous net cash outflows of 498 million yuan, 332 million yuan, and 561 million yuan, totaling 1.391 billion yuan.
**04 High Customer and Supplier Concentration, Facing Competition from OEM Self-Development**
This IPO aims to use proceeds for R&D and expanding intelligent cockpit + X product matrix. However, global and Chinese integrated domain controller solution industries face intense competition. As a late-entering third-party supplier, Megatronix competes against well-funded large tier-1 suppliers, global automotive electronics groups, and capable self-developing OEMs.
Regarding Megatronix's losses, some view that while Megatronix holds numerous customers, stabilizing these relationships requires giving concessions to automakers. Moreover, some enterprises losing money on vehicle sales transfer cost pressures to suppliers, forcing Megatronix to share losses, pressuring market share, pricing, and profitability.
From 2022-2024, Megatronix's top five customers contributed 92.8%, 91.2%, and 84.7% of revenues respectively, with largest customers accounting for 52.8%, 53.0%, and 22.8%. While customer concentration shows declining trends, proportions remain high. Changes in major customer procurement could significantly impact revenues.
Additionally, intelligent cockpit sectors depend on high-end chip solutions, requiring frequent product upgrades to meet new OEM demands. Megatronix's operating costs remain consistently high, with hardware materials as primary expenses, accounting for 96.3%, 98.9%, and 98.7% of total costs respectively.
Megatronix acknowledges that effective cost management is crucial for maintaining healthy gross margins and supporting sustainable growth in highly competitive industries.
Regarding suppliers, Megatronix's procurement concentrates among few suppliers. During the period, top five suppliers collectively accounted for 69.1%, 82.4%, and 77.2% of total procurement respectively, with single largest suppliers accounting for 48.3%, 48.2%, and 34.3%. This means supply disruptions or relationship deterioration could impact operations.
Currently, Megatronix is accelerating product iteration upgrades, focusing on cockpit-driving integration and other higher-integration, richer-function solutions to pave the way for future performance growth.
**Appendix: Megatronix IPO Intermediary Institution List** Joint Sponsors: China International Capital Corporation (Hong Kong) Securities Limited | Citigroup Global Markets Asia Limited | Deutsche Securities Asia Limited
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