China’s ride-hailing giant Didi Chuxing, on Thursday (June 10) filed filed paperwork for an initial public offering in the United States, setting the stage for what is expected to be one of the largest tech debuts globally this year.
Didi which is not only known as the Uber of China, but actually beat Uber in the country and bought out its business there, did not state a targeted amount to raise but plans to list American Depositary Shares (ADSs) on either Nasdaq or the New York Stock Exchange under the symbol “DIDI”.
The company could have a $100 billion valuation at the time of its IPO, according to a Bloomberg report while The Wall Street Journal reported that Didi could receive a $70 billion valuation through the offering, and will seek to raise up to 10% of that amount. Meanwhile, sources familiar with the matter told Reuters that it could raise around $10 billion and seek a valuation of close to $100 billion.
The Beijing-based company was founded in 2012 and is backed by Asia’s largest technology investment firms, SoftBank, Alibaba and Tencent. Most recently Didi was valued at $62 billion following an August fundraising round, according to PitchBook data.
Didi does not operate in the U.S., but does operate in 15 countries in Asia, Africa, Europe and South America and has 493 million annual active users, as well as 15 million annual active drivers, according to its filing.
Aside from ride-hailing, Didi also offers bike-sharing services, freight services, food delivery, leasing and maintenance plans for drivers’ cars, and an electric-vehicle charging network.
“We aspire to become a truly global technology company. While our business started in China, we believe we can help make life better for many more people around the world in a similar way,” Didi’s founder and CEO Cheng Wei said in a regulatory filing “What we have learned and built is relevant across the globe – in Latin America, Russia, South Africa or anywhere where affordable, safe and convenient mobility is valuable.”
Didi started 2021 strongly, posting a profit in the first quarter on RMB 42.16 billion ($6.44 billion) in revenue. Some of the company’s profitability this past quarter can be credited to gains on investments of $1.9 billion related to spin-offs and divestments.
Didi is one of several Chinese tech unicorns seeking to go to market on American bourses
amid ongoing US-China tensions. Beijing and Washington tussle over a variety of issues.
“Such tensions between the United States and China, and any escalation thereof, may have a negative impact on the general, economic, political, and social conditions in China and, in turn, adversely impacting our business, financial condition, and results of operations,” the company said in its prospectus.
The company has other concerns such as Covid-19, too.
“If the situation takes a turn for the worse in China, or if there is not a material recovery in other markets where we operate, our business, results of operations and financial condition could be materially and adversely affected,” Didi said in its prospectus.
Didi stated that it expects to spend 30% of the proceeds of the IPO on improving its technological capabilities, “including our shared mobility, electric vehicle, and autonomous driving technologies”; 30% on growing its international operations outside of China; and 20% on developing new offerings and expanding what the company currently offers. The rest would go to general corporate purposes.
The IPO will be led by underwriters Goldman Sachs (Asia), Morgan Stanley and JP Morgan.