Ride-hailing Company Dida Chuxing today filed for an initial public offering (IPO) on Hong Kong stock exchange.
Haitong International Capital Ltd. and Nomura International (Hong Kong) Ltd. are joint sponsors on this deal.
With a market share of 66.5%, Dida is the largest carpooling provider in China in terms of the number of carpooling rides in 2019, according to a Frost & Sullivan Report.
The report also said Dida ranked as the No. 2 online mobility platform in China’s taxi market in terms of the number of rides in 2019.
As of June 30, 2020, the company has offered its carpooling service in 366 cities nationwide, with approximately 19.2 million registered private car owners, including approximately 9.8 million certified private car owners.
According to the prospectus, the company said they are well positioned to capture the enormous market opportunity.
In 2018 and 2019, its carpooling marketplace generated approximately 48.2 million and 178.5 million rides, representing a GTV of approximately 1.9 billion yuan and 8.5 billion yuan.
Unlike other cash-burning startups, Dida has become profitable in terms of adjusted net profit since 2019. Its adjusted net profit was 172.4 million yuan and 150.8 million yuan in 2019 and the six months ended June 30, 2020, representing an adjusted net profit margin of 29.7% and 48.6% for the same periods, respectively.
Dida is backed by China’s EV carmaker Nio Inc. (NYSE: NIO) and IDG Capital, a well-known private equity and venture capital firm.
The ridesharing company is looking to increase market share to compete with rival Didi Chuxing Technology Co., which is also seeking a Hong Kong IPO.
According to Caixin Global, Beijing-based Didi Chuxing is readying a Hong Kong IPO as investors look to cash out on the company. Between 2015 and 2018 SoftBank poured more than $10 billion into Didi and is now its largest investor. The bank also led a funding round in May that helped Didi raise more than $500 million. Some other large investors in Didi include the American smartphone heavyweight Apple Inc., (Nasdaq: AAPL) which invested $1 billion into the firm in 2016.