China’s Didi to make debut on US stock market

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Reuters

One-liner: Chinese ride-hailing service Didi says it lost $5.5bn over the past three years ahead of its US stock market debut but it remains optimistic in terms of its global reach and investments in electric and self-driving cars.

Chinese customer base: The Beijing-headquartered company operates in 16 countries, however, 90% of the 493 million customers who used the service at least once in the past year are in China.

Projections: Didi Global Inc. planned to raise up to $4bn by selling 288 million shares on the New York Stock Exchange at $13-$14 each. It said 30% will be spent on technology development, another 30% to expand outside China, and 20% on new products.

An integrated platform: The company founded in 2012 by Will Wei Cheng, a veteran of e-commerce giant Alibaba Group, says it aims to become the world’s largest one-stop transportation platform.

Global aspirations: “We aspire to become a truly global technology company,” said Cheng and president Jean Qing Liu in the prospectus. Liu is a former Goldman Sachs managing director and the daughter of Liu Chuanzhi, founder of computer maker Lenovo Group.

Investors: Early investors included Apple, Japan’s Softbank, Alibaba and Chinese internet giants, Tencent Holding and Baidu.

Acquisitions: Didi acquired rival Kuaidi in 2016 and Uber Technologies Inc.’s China operation the following year, ending a battle in which, the American company said it was losing $1bn a year.

Conflicting interests: China’s populous ride-hailing market has gone through abrupt changes as the ruling Communist Party tries to nurture the development of technology while keeping control of promising industries.

Global expansion: Originally founded as a smartphone-based taxi-hailing service, it launched ride-hailing in 2014 and expanded abroad in 2018 by acquiring Brazil’s 99 Taxis and setting up operations in Mexico.

Increasing regulations: In 2015-16, regulators tightened control on ride-hailing services, with moves requiring drivers to be closely supervised by residents of towns they worked in. This was all masqueraded as an effort to curb traffic and promoted rider safety.

Expanding horizons: Didi has poured money into the development of self-driving, electric vehicles, and other technology. The company launched an electric car last year with Chinese automaker BYD Auto, a unit of BYD Ltd.

Declining profits: Didi lost 15bn yuan ($2.3bn) in 2018, 9.7bn yuan ($1.5bn) in 2019 and 10.6bn yuan ($1.6bn) last year, according to its prospectus. It says Didi had $3bn in cash as of Dec. 31

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