Didi Chuxing, China’s largest ride-hailing service, has filed for a US initial public offering (IPO) at a reported $70 billion valuation. The company filed under the business name Xiaoju Kuaizhi Inc., with Goldman Sachs Group Inc., Morgan Stanley, and JPMorgan Chase & Co. leading the offering.
Before moving ahead with its IPO plans, the company revealed a $1.6 billion net loss for 2020. Didi also reported a 2020 revenue of $21.6 billion, more than Lyft and Uber made.
According to a Bloomberg News report in April, Didi has been seriously considering seeking a valuation of as much as $70 billion to $100 billion in the IPO.
In recent months, however, the company has traded at a valuation of about $95 billion on the secondary market. While there’s no official comment on the company’s current valuation, Didi last raised funding at a $62 billion value last year, according to PitchBook.
It’s no news that Didi is currently operational in 15 countries across the world. Yet, most of the company’s revenue comes from its China mobility business.
As China recovered from the COVID-19 pandemic this year, Didi’s revenue more than doubled to hit $6.4 billion, reporting a net income of $837 million.
For a company that faced the effects of the global pandemic head-on, an IPO would cap a remarkable turnaround for Didi which also marks a monumental year for Chinese tech IPOs.
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IPOs this summer are only revving up
Bankers forecast that US-listed IPOs could raise up to $40 billion between June and August 2021, beating 2020’s record of $32 billion, according to the Wall Street Journal (WSJ).
In May, Oatly went public, setting the stage for a monumental IPO season. Robinhood Markets Inc. is also preparing for a highly anticipated IPO at a potential $40 billion valuation. And then, of course, Krispy Kreme has also filed to go public, making it the donut chain’s second time trading publicly.
The future for Didi
Didi, which remains the dominant player in China, is looking to leverage its investments in community buying, one of China’s hottest e-commerce growth areas, to expand into autonomous driving and electric vehicles.
In its filing, the company also said it plans to list its American depositary shares under the symbol DIDI. We’re yet to know on which exchange Didi plans to list.
