Chinese ride-sharing giant Didi plans to go public in 2021, likely in Hong Kong, targeting a valuation of around $60-80 billion, LatePost reported, adding that Didi is currently in contact with investment banks including Goldman Sachs and JPMorgan Chase.
Didi was founded in 2012 and has raised more than 100 billion yuan in cumulative funding to date, having received backing from SoftBank, Alibaba and Tencent.
Didi's growth slowed after a safety incident with its carpooling service in 2018, and ride-hailing orders once fell below 10 million during Covid-19 in 2020. Against this backdrop, "some investors are eager to cash in," the report said.
In the private equity market, some of Didi's shares are trading well below the $56 billion valuation they received in 2017. A large fund bought a portion of Didi's stock in 2020 for a $35 billion valuation, the report said.
After a year of recovery, investor confidence in Didi has turned back. On the one hand, that's because orders for its main business, ride-hailing, have surpassed year-ago levels and Didi is making progress on a number of new businesses.
On the other hand, Didi's US peer Uber has also seen a huge boost in market capitalization, rebounding from a low of less than $30 billion to more than $90 billion as capital markets have changed dramatically.
The report cites an industry analyst who says Didi chose Hong Kong over the US for its IPO mainly because of uncertainty over US policy. the US Congress passed the Foreign Company Holding Liability Act in December 2020, putting companies listed in the US at risk of delisting.
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