China’s top ride-hailing firm Didi plans to raise $60-$80 billion for its initial public offering in Hong Kong in 2021 and is currently in contact with investment banks, including Goldman Sachs and JPMorgan Chase, according to LatePost.
Founded in 2012, Didi raised billions of investment in the past few years from top shareholders, including Alibaba, Tencent, and Softbank. After a security incident in 2018, where a driver raped and murdered a female passenger, Didi saw a severe decline in its growth. Some experts estimated that Didi’s current shares value is well below the estimated value in 2017 of $56 billion.
However, after a year of “cultivating internal strength,” Didi is confident in its growth for 2021. Didi began generating a healthy profit in the second quarter this year and some investors are now keen to cash in, according to Didi’s interview with Reuters.
Instead of listing in New York, a city that has a significant presence of its peers like Uber and Lyft, Didi plans to list in Hong Kong amid the rising Sino-American tension. Many US-listed Chinese companies are facing tightened scrutiny and stricter audit requirements recently, such as TikTok’s owner ByteDance.
Uber and Didi have long-standing relationships. In 2016, Uber sold its Chinese operation to Didi in exchange for a 17.5% stake in the Chinese firm, leading to a $1 billion investment in Uber.
If Didi’s IPO is successfully completed, it would help Hong Kong take the second spot in the global stock exchange league table after Nasdaq.