Xiaoju Kuaizhi Inc., more known as Didi Chuxing, revealed its financials ahead of an anticipated initial public offering in New York.
The Beijing-based company, operating China’s largest ride-hailing platform, showed a profitable first quarter after a loss-making 2020, which can be attributed to gains from spin-offs and divestments. Last year, revenue reached $21.6 billion on losses of $1.6 billion. In the three months through March, Didi booked $6.4 billion in revenue on $837 million income, according to the prospectus filed Thursday.
News that Didi picked New York as its listing destination of choice surfaced in April, when Bloomberg reported the company filed confidentially for an IPO that could fetch “several billion dollars.” The deal would place Didi in trading alongside two American ride-hailing rivals Uber (NYSE: UBER) and Lyft (Nasdaq: LYFT). It is expected to be the largest IPO by a Chinese company in the U.S since 2014 and one of the largest listings of 2021 globally.
Didi has presence in 15 countries, counts 493 million annual active users and 15 million active drivers. In the first quarter, it averaged 41 million daily transactions.
Investors in Didi include Tencent (HKEX: 00700; OTC: TCEHY), SoftBank (OTC: SFTBY), Alibaba (NYSE: BABA; HKEX: 09988)
In a letter to investors opening the prospectus, Didi founders, Will Wei Cheng and Jean Qing Liu, mentioned the “tragic safety” incidents of the summer of 2018, referring to the two murders by carpool drivers of the company. Cheng and Liu wrote that the incidents led them to refocus on fundamentals:
“We don't just connect people with information or merchandise. Instead, we do something far more important — we transport people, including mothers, fathers, grandparents, and children. That means we are responsible for the most precious thing of all — their lives.”
The company then made “significant” changes to “our driver onboarding process, including enhanced background checks,” installed smart devices with telematics and safety hardware, and established a "SWAT" team to respond to safety incidents.
Didi said it will use the IPO capital to invest in technology, including shared mobility, electric vehicle, and autonomous driving tech; it also plans to expand overseas, launch new products and expand existing offerings.
Securing the deal is Goldman Sachs (Asia) LLC, Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, and China Renaissance Securities (Hong Kong) Ltd.
Xiaoju aims to become publicly traded under the stock symbol “DIDI.”