All that capital has paid for customers and expansion. Didi reported 377 million active users in China for the year ended in March. It is also now building out in freight, finance and beyond in 15 countries. China’s pandemic recovery helped the top line more than double in the first quarter, to $6.4 billion, and Didi even generated a net profit largely thanks to some investment income.
The gross bookings, before stripping out the large percentage that goes to drivers, pales against the $20 billion Uber delivered in the same quarter. Overseas initiatives and heavy investment in areas including electric vehicles and autonomous driving are also costly. Boss Will Wei Cheng is committed to chasing such growth: Didi plans to use 30% of the IPO proceeds to expand its international reach.
As prospective investors run the rule over the numbers for what might be the biggest U.S. market debut of a Chinese company since Alibaba, there are other sticky matters to consider. Didi is under domestic regulatory pressure to treat drivers better. It also was among those hauled in by the Ministry of Transport for allegedly charging unreasonably high commissions and implementing irregular pricing rules.
What’s more, the S&P 500 index is trading at an all-time high. And American lawmakers, frustrated by the lack of accounting oversight and other concerns, keep angling to starve Chinese companies of U.S. capital. With valuation figures of $100 billion – bigger than Uber’s market capitalisation – kicking around, the Didi fare could be pretty steep.
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