Didi Chuxing, China’s Ride-Hailing Giant, Unveils U.S. IPO Filing

The Four Percent


Didi Chuxing Technology Co., the Chinese ride-hailing behemoth, made its IPO papers public on Thursday, setting the company up to raise billions and begin trading publicly in the U.S. in July.

Didi, which filed under its formal name of Xiaoju Kuaizhi Inc., could fetch a valuation upward of $70 billion, people familiar with the matter said, a number that could stretch even higher amid investors’ ravenous appetite for newly public, high-growth companies.

The company is expected to raise roughly 8% to 10% of the valuation amount in the offering, people familiar with the matter said, money the company says it will use to invest in technology, grow its business outside of China and introduce new products.

Much like

Uber Technologies Inc.


UBER 0.61%

in the U.S., Beijing-headquartered Didi operates a smartphone app where users can hail rides, as well as regular taxis and carpooling services. Didi is known for successfully pushing Uber out of China, winning a bruising price war that ended in 2016 when Uber merged its China unit with Didi in exchange for a stake in Didi.

Didi hasn’t yet selected an exchange but said it plans to list its American depositary shares under the symbol DIDI.

For the full year 2020, the filing shows the company posted revenue of 141.74 billion Chinese yuan, equivalent to $21.63 billion, down 8.4% from a year earlier as the coronavirus pandemic led to quarantines, travel restrictions and limitations on public gatherings.

Like many technology startups, Didi has a history of losing money, though in the first three months of 2021, it posted a profit of 196 million yuan, or about $30 million. For 2020, it posted a net loss of 10.68 billion yuan, equivalent to $1.63 billion, and it also lost money in the full years 2018 and 2019.

In comparison, Uber posted full-year revenue of $11.14 billion in 2020, with a loss of $6.77 billion.

The value of all transactions on Didi’s platform fell by nearly a third in the first three months of 2020 from a year prior, hurt by the pandemic, and didn’t start growing again until the second half of 2020.

Didi was founded in 2012 by

Cheng Wei,

a technology whiz who previously worked at e-commerce giant

Alibaba Group Holding Ltd.

, and merged with a domestic rival in 2015 to gain scale. Now 38 years old, Mr. Cheng was worth $2.8 billion last year, according to Shanghai research firm Hurun Report. He owns 7% of the company’s shares and controls 15.4% of its voting power before the IPO, according to the filing.

Other high-profile investors in Didi include

SoftBank Group Corp.

, which owns 21.5% of the company prior to the IPO; Uber, which owns 12.8%; and

Tencent Holdings Ltd.

entities, which own 6.8%.

While several rivals have emerged in China in recent years, Didi retains overwhelming dominance in a Chinese ride-hailing market that could be worth $99.5 billion by 2023, according to Daxue Consulting, up from $53.5 billion in 2019. Didi operates in 14 countries outside China, though its home market accounts for most of its journeys.

Didi also runs a logistics service, enabling users to book vans with drivers to transport goods in or between China’s main cities.

Earlier this year, Didi was one of several big tech companies fined by Chinese regulators for alleged monopolistic practices. Last month regulators summoned Didi and nine other mobility companies for a warning over their treatment of drivers.

Like other technology companies, Didi is now moving to develop its own electric vehicles with help from legacy auto players. Last month it formed a strategic partnership with state-run auto maker Guangzhou Automobile Industry Group to develop autonomous EVs. Didi began working on autonomous-driving capabilities in 2016, and launched a robotaxi service in Shanghai last year.

Write to Corrie Driebusch at corrie.driebusch@wsj.com and Trefor Moss at Trefor.Moss@wsj.com

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