China-headquartered ride hailing service provider Didi Global went public in a $4.44bn IPO on the New York Stock Exchange. The company counts multiple corporates among its backers, including internet conglomerate SoftBank, internet company Tencent, e-commerce company Alibaba, insurance firms China Life and Ping An electronics producer Apple, online travel agency Booking Holdings, car rental service eHi and social media company Sina Weibo. Didi increased the number of shares in the offering from 288 million to approximately 317 million American Depositary Shares (ADSs), with four ADSs equalling one class A share. The company priced its shares at the top of the IPO’s $13 to $14 range. Investment bank Morgan Stanley’s Investment Management, Morgan Stanley Asia and Morgan Stanley Investment Management Company had expressed interest in purchasing $750m of shares and Temasek – $500m. Didi plans to use the IPO proceeds for further investment in its technology and international expansion.
Formed after the merger of peers Didi Dache and Kuaidi Dache in 2015 and formerly known as Didi Chuxing, Didi operates an on-demand ride service spanning its home country of China but has presence in Russia, Africa, Latin America, Central Asia and the Asia Pacific regions as well. It also offers food and package delivery in addition to automotive and financial services. Didi’s annual revenues decreased slightly to $21.6bn in 2020 versus the previous year due to the impact of the pandemic, while its net loss rose 9% to $1.62bn.
Didi is part of the broader ride-hailing space, which has seen much interest by corporate investors over the past decade, as illustrated by the GCV Analytics bar chart below. The number of corporate-backed deals in this space peaked in 2017 (59) and 2018 (61) but have been going down since. Similarly, total estimated capital in such deals reached an all-time high at $22.2bn in 2017 and has been going down since as well. The latter has roughly coincided with the end of the ride-hailing business war around the globe, which culminated with established names in the field either getting acquired (Careem) or going public (Uber, Lyft) from 2019 onward.
