Didi IPO: China’s passenger carrier gears up to showcase the US in its quest to go ‘truly global’

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China’s largest passenger van is likely to appear on Wednesday in New York, according to public filings. Reuters and The Wall Street Journal reported that Didi priced the shares at $14 apiece, raising about $4.4 billion and making it the largest Chinese initial public offering in the United States since Alibaba’s $25 billion offering in 2014, according to Dealogic.

That would give the company a valuation of more than $67 billion, according to reports citing unnamed sources. Didi did not respond to a request for comment.

Didi, which forced Uber out of mainland China five years ago, is listing on Wall Street at a sensitive time. The company has attracted scrutiny from regulators in China, where the tech sector is undergoing a historic crackdown, and in April, the passenger carrier was one of 34 companies called to meet with the State Administration for Market Regulation (SAMR), where executives were present. He was asked to end any anti-competitive behavior and ordered internal inspections, this month, Reuters reported that Didi is under investigation over antitrust concerns. According to the report, which cited anonymous sources, Didi was under investigation by SAMR about whether she had “used any competitive practices that unfairly pressure smaller competitors”.

Didi said in a statement at the time that she “will not comment on unfounded speculation from unnamed sources.” SAMR did not respond to a request for comment from CNN Business.

The company is also making a recovery in New York amid heightened tensions between the US and China, while several major Chinese technology companies are trading in the US, including Alibaba (BABA) and JD.com (JD), the environment has become more volatile lately. Years. Recently, a group of Chinese companies listed on Wall Street staged secondary bids in Hong Kong so they could establish stronger roots closer to home, with some reporting that regulatory hurdles are getting worse in the United States. Some, such as China Mobile and China Telecom, have been launched from US stock exchanges entirely.

Despite the tensions, 2020 still sees about $12 billion raised by Chinese companies from a US listing, according to data provider Refinitiv. Chinese companies have raised nearly $8 billion so far in 2021, more than three times the amount reached at the same point last year.

Didi is a symbol for both directions. Its upcoming debut will mark one of the top 10 US listings over the past decade, as well as the fourth-largest initial public offering in the US by a Chinese listed company, according to Dealogic.

But in recent months, the company has also considered a dual listing in Hong Kong, according to a person familiar with the matter.

Chinese hero

Didi is ubiquitous in China, and has 377 million annual active users in the country alone. The company was founded in Beijing in 2012 by former Alibaba CEO Cheng Wei, who created the taxi service provider known as “Didi Dache”, which means calling taxis in Mandarin. Didi quickly won the support of heavyweights including Apple (AAPL), SoftBank (SFTBF) and Alibaba (BABA), while also beating rivals. In 2015, it acquired its biggest domestic competitor, Kuaidi Dache, effectively knocking a rival horse out of the race. The new combined company renamed its flagship app Didi Chuxing shortly thereafter. In 2016, Didi also bought the Uber business in China, ending the US company’s presence there. Former Uber CEO Travis Kalanick acknowledged Diddy was a “fierce competitor,” and agreed that the companies would exchange stakes. (Diddy exited its Uber (Uber) position late last year. Uber holds about a 12% stake in Didi.) Since then, Didi has swelled to offer a full range of services, including rides, bike sharing, taxis and car sharing services.

The company now considers itself the world’s largest mobility platform, with users in China and 15 other countries, including Brazil, Mexico and Russia.

But it still relies heavily on its home market: more than 93% of its sales come from China.

The company is looking to change that. Didi, in the SEC filing, said it plans to use a third of the money it raises to expand its presence outside of China. “We aspire to become a truly global technology company,” Will Wei-cheng and Jean-Cheng Liu, who serve as CEO and President, respectively, wrote in a letter to investors.

Another third of the funding will be used to develop its technology in areas such as electric cars and autonomous driving. The rest will go toward creating new products or services or other strategic investments. Cheng and Liu said in their letter that the company is exploring new launches in areas such as “in-city shipping, community group buying and food delivery.”

Like many startups, Didi has struggled to turn a profit for years, despite generating billions of dollars in revenue.

And it finally managed to turn that around this year, generating nearly $800 million in net income for the quarter ending in March.

“Diddy is an amazing innovator, founder-led, and industry leader,” Jim Brayer, founder and CEO of Brayer Capital, an investor, told CNN Business in an email. “I’ve been honored to watch their leadership since I first invested several years ago and look forward to the next chapter of growth.”

The company plans to list on the New York Stock Exchange under the ticker symbol “DIDI”.

CNN’s Beijing office, Pamela Boikov, Jill Disis and Diksha Madhuk contributed to this report.

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