Didi Global Inc., the Chinese ride-hailing behemoth looking to expand into new regions and sectors, is looking to raise almost $4 billion in its initial public offering, valuing it at $62 billion to $67 billion. According to its most recent filing with the Securities and Exchange Commission, Didi DIDI is offering 288 million American depositary shares at $13 to $14 each. According to Dealogic, if the shares sell at the midpoint, the business will raise $3.9 billion, making it the second-largest IPO of the year so far after Coupang Inc. CPNG, +2.27 percent and among the largest U.S. IPOs of the past decade in terms of both transaction value and market value.

According to the Wall Street Journal, Didi could reach a fully diluted valuation of more than $70 billion. That would make the company’s market valuation second only to ride-hailing giant Uber Technologies Inc. UBER, -1.20 percent, and more than three times that of Lyft Inc.
LYFT is down 4.50 percent.
The 9-year-old company will trade on the New York Stock Exchange under the ticker name DIDI and will provide cab hailing, delivery, and other services. Here’s a closer look at what the business said in its first public offering filing: It has a tumultuous relationship with Uber. As Didi goes public in the United States, comparisons between the world’s top two ride-hailing businesses may become increasingly common. Didi claims to have hundreds of millions of riders in China and to operate in 16 countries and approximately 4,000 cities in its filing. Its additional offerings include intra-city freight, community group buying, and food delivery, in addition to ride hailing. Uber, based in San Francisco, stated in its 2020 annual report claimed it operated in 71 countries and 10,000 cities as of December 31, 2020. Uber provides transportation, delivery, and freight services. Despite the fact that it sold its autonomous-vehicle business last year, it has a cooperation with Aurora Technologies, a self-driving startup. Didi has a lot in common with Uber (and its smaller rival Lyft) in terms of being primarily unprofitable. It did, however, make a profit in the first quarter, declaring a net profit of 5.49 billion rembini ($837 million) on revenue of RMB 42.16 billion ($6.44 billion), up from a loss of RMB 3.97 billion on RMB 20.47 billion the year before. Its investments were largely responsible for this profit. See Didi, a Chinese ride-hailing business, files for an IPO with a feature that none of its American competitors have: profit Uber sold its Chinese business to Didi for $7 billion in 2016, following a war in which both Didi and Uber lost a lot of money trying to undercut one other in China. “Uber and Didi Chuxing are investing billions of dollars in China, yet both firms have yet to earn a profit there,” said Travis Kalanick, Uber’s CEO at the time, in a blog post announcing the deal. However, Uber still owns a 12.8 percent share in Didi, which will be cut to a 12 percent ownership following the IPO. This is the company’s second-largest stake, behind SoftBank Group’s 21.5 percent stock before to the IPO. The number of shares Uber owns might be worth $1.94 billion at the midpoint of Didi’s estimated selling price. According to Didi’s filing, it sold all of its Uber shares for a profit of RMB 2.8 million ($427,417) last year. Insiders will be in charge. Didi will have a dual-class stock structure, as has been the case with many recent IPOs, particularly in the tech area. Each Class A share (equivalent to four ADS) will receive one vote, whereas each Class B share will receive ten votes. All issued and outstanding Class B ordinary shares will be owned by Will Wei Cheng, co-founder and President Jean Qing Liu, and CEO of the international business group Stephen Jingshi Zhu, who all sit on the board. Following the public offering, these shares will account for 9.8% of the company’s total issued shares and 52 percent of the voting power. Cheng, 38, is also the board’s chairman. After the IPO, the former Alibaba and Alipay executive would own 6.5 percent of the company but have 35.5 percent of the voting power. Cheng hired Liu two years after establishing Didi. After the offering, she will own 1.6 percent of the company. Apart from Didi’s senior executives, SoftBank, and Uber, Tencent Holdings will have a 6.4 percent ownership in the company after the IPO. ‘Darkest days’ is a phrase used to describe a period of time In the summer of 2018, two female passengers on Didi’s Hitch app were slain by drivers. Under a section titled “Our darkest days,” Cheng and Liu wrote in their founders’ letter, “These rocked us to our core.” According to them, the corporation rebuilt its technology with safety in mind, modified how it onboarded drivers, enhanced background checks, and changed how it onboarded drivers. Didi has also developed a “SWAT team” to respond to safety incidents. The corporation has installed video cameras in its ride-hailing vehicles in regions where it is permitted. The adjustments resulted in “a large drop in the number of criminal occurrences per million rides on our platform, as well as significant declines in the number of in-car arguments and traffic accidents,” according to the business. Although the number of occurrences has decreased, the corporation claims that safety is still a concern. Factors that are at risk The Chinese government’s recently stepped-up antitrust assault on digital companies, including Didi, is another major risk concern for the company. Didi stated in its application that while it had undertaken a self-inspection and attempted to repair or improve in certain areas, it couldn’t guarantee that the government would be satisfied. Government regulators are also worried about driver income, pricing, and fairness to all platform participants, including riders and drivers, according to the business. Didi treats its drivers as independent contractors, not employees, like its major competitors. Didi argued in its filing that if drivers were classed as employees, laborers, or quasi-employees, it would hurt its company. In terms of how the COVID-19 pandemic has impacted and continues to impact Didi’s operations, the firm reported that the gross transaction value of its core platform declined 4.8 percent in 2020 compared to 2019. The GTV of its mobility business in China fell by 6.6 percent during the same time, while foreign GTV increased by 11.4 percent. As an ongoing danger factor, Didi cited an increase in coronavirus cases in certain parts of the world. Other companies Didi claims to have the world’s largest network of electric vehicles on its platform: 1 million as of the end of last year, including hybrids. According to the business, those EVs account for roughly 40% of all electric vehicle kilometers driven in China, according to a research it commissioned. Didi has created its own electric vehicle, the D1. In the first quarter of 2021, it claims to have constructed China’s largest charging network, with a market share of more than 30% of total public charging volume. Didi claims to have a staff of more than 500 people working on Level 4 autonomous vehicles for its fleet. Self-driving vehicles, according to the business, will assist meet the growing demand for ride-hailing services. “By 2040, the global mobility market is estimated to have grown to $16.4 trillion, with 23.6 percent and 29.3 percent penetration of shared mobility and electric vehicles, respectively,” it claimed in its filing, citing research it commissioned.
Continue reading