Didi, Uber of China, files US IPO request as Covid recovery continues

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Didi, the leader of constituency sharing in China, stepped towards a U.S. listing on Thursday that could be one of the biggest IPOs of the year.

The offer would test investor interest in Chinese companies with high revenue growth but losing money. Didi reported a loss of $ 1.6 billion in an IPO filing in the United States, on revenue of $ 21.6 billion last year. The company, which registered the name Xiaoju Kuaizhi, reported net profit of $ 837 million in the first quarter of 2021 on revenue of $ 6.4 billion. However, its first quarter operating loss 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 villages, mainly in China.

The move comes as the Chinese economy – the second in the world – continues to recover from last year’s Covid setback. The country recorded 18% annual GDP growth in the first quarter compared to the previous year.

Disclosure of $ 1.6 billion loss in 2020 puts Didi among a host of big money-losing tech and internet companies in China, and comes amid recent government investigations into monopoly practices involving companies technological. Didi’s first quarter operating loss and net loss for 2020 follow recent losses at some of the country’s other biggest tech companies. E-commerce giant Pinduouo lost $ 433 million in the first quarter, delivery company Meituan lost $ 343 million, and Kuaishou recorded an operating loss of $ 1.1 billion in the first quarter.

Didi’s file did not indicate where the company aimed to register. Its last-round valuation was $ 62 billion, according to PitchBook. At this valuation, CEO Cheng Wei’s 7% stake would be worth $ 4.9 billion and President Jean Liu’s stake would be worth $ 1.05 billion.

Entities related 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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@rflannerychina

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