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Didi Chuxing Technology Co., Ltd. , the Chinese passenger services giant, announced its IPO papers on Thursday, sending the company raising billions and starting public trading in the United States in July.
People familiar with the matter said Didi, which has filed under its official name for Xiaoju Kuaizhi, could fetch a valuation of more than $70 billion, a figure that could stretch even higher amid investor appetite for new high-growth public companies. .
The company is expected to raise roughly 8% to 10% of the valuation amount in the offering, people familiar with the matter said, money the company says it will use to invest in technology, grow its business outside of China, and introduce new products.
Just like Uber Technologies Inc. UBER 0.83% In the US, Beijing-based Didi runs a smartphone app where users can welcome rides, in addition to regular taxis and carpooling services. Didi is best known for its success in kicking Uber out of China, and winning a painful price war that ended in 2016 when Uber merged its China unit with Diddy in exchange for a stake in Didi.
Didi has not chosen an exchange yet, but said it plans to list its US depository shares under the symbol DIDI.
For the full year of 2020, the filing shows the company generated 141.74 billion yuan of revenue, or $21.63 billion, in revenue, down 8.4% from the previous year, as the coronavirus pandemic led to quarantines, travel restrictions and restrictions on public gatherings.
Like many tech startups, Didi has a history of losing money, even though in the first three months of 2021 it posted a profit of 196 million yuan, or about $30 million. For 2020, it recorded a net loss of 10.68 billion yuan, equivalent to 1.63 billion dollars, and it also lost money in the whole of 2018 and 2019.
By comparison, Uber reported full-year revenue of $11.14 billion in 2020, a loss of $6.77 billion.
The value of all transactions on Didi fell by about a third in the first three months of 2020 from the previous year, affected by the pandemic, and did not start growing again until the second half of 2020.
Didi was founded in 2012 by Cheng Wei, a tech expert who previously worked for e-commerce giant Alibaba Group Holding Ltd. and merged with a local competitor in 2015 to achieve scale. Mr. Cheng is now 38, and his fortune was $2.8 billion last year, according to Shanghai-based research firm Huron. According to the filing, he owns 7% of the company’s shares and controls 15.4% of its voting power before the IPO.
Another notable investor in Didi is SoftBank Group Corp., which owned 21.5% of the company prior to the IPO. Uber which owns 12.8%; and Tencent Holdings Ltd. which owns 6.8%.
While several competitors have emerged in China in recent years, Didi has maintained an overwhelming dominance in the Chinese taxi market that could be worth $99.5 billion by 2023, according to Daxue Consulting, up from $53.5 billion in 2019. Didi operates in 14 countries outside of China, although its domestic market accounts for most of its travel.
Didi also operates a logistics service, which enables users to book trucks with drivers to transport goods within or between major cities in China.
Earlier this year, Didi was one of several major tech companies fined by Chinese regulators over alleged monopolistic practices. Last month, regulators called in Didi and nine other transportation companies to warn them about their treatment of drivers.
Like other tech companies, Didi is now moving to develop its electric cars with the help of vintage car starters. Last month, it formed a strategic partnership with the state-run Guangzhou Automobile Industry Group to develop autonomous electric vehicles. Didi began working on self-driving capabilities in 2016, and launched an automated taxi service in Shanghai last year.
Julie Steinberg contributed to this article.
Write to Corrie Driebusch at [email protected]
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