Didi is China’s top riding-hailing service. Photographer: Qilai Shen/Bloomberg
Didi, China’s riding sharing leader, on Thursday took a step toward a U.S. listing that could be one of the year’s largest IPOs.
The offering would test investor interest in China businesses with high revenue growth yet are losing money. Didi reported a $1.6 billion loss in a U.S. IPO filing, on revenue last year of $21.6 billion. The company, which filed under the name Xiaoju Kuaizhi, made a net profit of $837 million in the first quarter of 2021 on revenue of $6.4 billion. However, its loss on operations in the first quarter more than doubled to $1 billion.
Didi serves more than 493 million annual active users on its platform and facilitated 41 million average daily transactions for the 12 months ended March 31, 2021, according to figures in the company’s prospectus. It operates in 15 countries and nearly 4,000 cities, counties and towns, mostly in China.
The move comes as China’s economy – the world’s second largest – continues to recover from last year’s Covid setback. The country enjoyed 18% year-on-year growth in GDP in the first quarter from a year earlier.
The disclosure of a $1.6 billion loss in 2020 puts Didi in a crowd of big-name technology and Internet companies in China that are losing money, and comes amid recent government probes into monopolistic practices involving tech companies. Didi’s operating loss for the first quarter and net loss for 2020 follow recent losses at some of the country’s other largest technology-related firms. E-commerce giant Pinduouo lost $433 million in the first quarter, delivery firm Meituan lost $343 million, and Kuaishou had an operating loss of $1.1 billion in the first quarter.
Didi’s filing didn’t say where the firm aimed to list. Its last-round valuation was $62 billion, according to PitchBook. At that valuation, CEO Cheng Wei’s 7% stake would worth $4.9 billion and President Jean Liu’s stake would be worth $1.05 billion.
Entities tied to Softbank Vision Fund Entities own 21.5%, Uber 12.8% and Tencent 6.8%. of the company, according to the prospectus.
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