Chinese ride-hailing giant Didi Chuxing files IPO with potential Uber-beating valuation in US listing

Didi Chuxing, China’s largest ride-hailing service, publicly filed for an initial public offering in the United States on Thursday, potentially setting it up to be more valuable than rival Uber Technologies.

Filing under its formal name Xiaoju Kuaizhi, Didi did not indicate which US exchange it plans to list or the size of its offering. The company, which initially filed confidentially in April, is still considering a listing between the New York Stock Exchange and Nasdaq, a person familiar with the matter said.

The size of the offering could be a blockbuster as its post-money valuation hit US$62 billion following its latest fundraising round in 2019, up from US$56 billion in 2018.

The Beijing-based company has been thinking about raising US$10 billion from the share offering, which could potentially value the firm at up to US$100 billion, Reuters previously reported, citing sources familiar with the matter.

Didi has raised US$19.2 billion of capital in private markets since it was founded in 2012. Didi counts SoftBank, Tencent Holdings and Alibaba Group Holding among shareholders, as well as Toyota Motor and Uber. Alibaba owns the Post.

It is one of several Chinese tech unicorns seeking to go to market on American bourses even as Beijing and Washington tussle over a variety of issues, including Hong Kong, Taiwan and human rights. Chinese unicorns considering or pursuing US listings include ByteDance’s Chinese short-video platform Douyin, Ant Group-backed bike-sharing giant Hello Inc and Tencent-backed online education firm Huohua Siwei.

On June 4, the Biden administration expanded a ban that prohibits Americans from investing in Chinese companies that purportedly have ties to the Chinese military, raising the total number of blacklisted companies to 59.

Ahead of this weekend’s Group of 7 (G7) meeting, the US Senate passed sweeping legislation to pump billions of dollars into the American semiconductor manufacturing sector and other key industries and provide greater levers to confront China’s growing power on the world stage. The Biden administration also ordered a review of security concerns posed by popular Chinese apps after revoking a Trump era ban on TikTok and WeChat.

On Thursday, the National People’s Congress Standing Committee passed a broad anti-sanctions law to provide that provides the legal basis to retaliate against individuals, their families and organisations responsible for imposing sanctions against China.

A Didi Chuxing driver on the job in Beijing

In 2020, Didi’s revenue slumped to 141.7 billion yuan (US$22.2 billion), a 8.4 per cent decline from 154.8 billion yuan in 2019, as the coronavirus pandemic lead to lockdowns and slowed travel last year.

The company reported a net loss of 10.7 billion yuan for full-year 2020 and losses in the prior two years, but reported a profit of 196 million yuan in the first quarter.

Didi is the dominant player in ride-hailing in China, a market that could reach US$3.9 trillion by 2040, according to China Insights Industry Consultancy.

The company also operates in 14 international markets outside China and has 493 million annual active users, as well as 15 million annual active drivers, according to its filing.

Didi, Tencent and eight other big tech companies were fined by China’s antitrust regulator in April for failing to report the acquisition of smaller competitors and starting new joint ventures as part of a crackdown on the tech industry.

Goldman Sachs, Morgan Stanley, JPMorgan and China Renaissance are acting as underwriters on the offering.

Author: Chad Bray, South China Morning Post