![]() ![]() The listing of the Chinese ride-hailing company started well until, just two days after the IPO, news came out that Didi was under scrutiny from the Chinese government with regards to its data collection and security practices. Didi is now rather pursuing the grocery delivery market instead. The food delivery opportunity in China is already dominated by Meituan and Alibaba’s Ele.me, leaving limited space for Didi to expand in that space. Although the GTV from ride-hailing of both companies are at similar levels, the total GTV of Uber is about USD 58bn while Didi’s is only USD 31bn. In 2020, 35% of Uber’s revenue was generated by the delivery business. Uber has successfully diversified in food delivery services “Uber Eats”. The second element is business diversification. Uber is the leader by market share not only in the US, but also in Europe, Latin America, Australia, and India while overseas expansion has so far been limited for Didi. Within Uber’s revenue only 60% is generated in the US while 98% of Didi’s revenue is generated in China. First is the regional diversification element. So, why was Didi priced at a discount to Uber? We see two elements that can explain it. Didi’s net loss was USD 1.3bn in 2020, whereas Uber booked USD 4.8bn of net losses. The companies are still very comparable in size with Gross Transaction Values (GTV) for ride-hailing services of roughly USD 27bn in 2020 for both although Didi has a stronger revenue and profit profile. The valuation of Didi at IPO was around USD 68bn, representing a discount to Uber’s USD 100bn market cap. Didi then became the dominant player in China while Uber received a stake in the company (12% currently). In 2016, Apple became a shareholder of Didi, and, the same year, in a surprise move after years of fierce competition, Didi acquired Uber’s operations in China in a share swap transaction. Established in 2012, the company was backed by Tencent and merged with its main competitor Kuaidi, backed by Alibaba, in 2015. Didi is a ride-hailing app, which works exactly as Uber does. IPO is seen as an example of the great lengths the Chinese government will pursue, even if a company has a high-profile name and numerous foreign investors.Didi, often dubbed the Chinese Uber, listed last week in the US. “After communication with the relevant regulators, Ximalaya understands that a Hong Kong listing would be regarded as a preferred outcome,” the source told FT.Ĭhina’s crackdown on Didi following its U.S. The Chinese podcast platform Ximalaya recently suspended its U.S. The truck-hailing app Full Truck Alliance and online recruiter Boss Zhipin are two of the many Chinese companies that filed plans to go public in New York IPOs this year and are being subjected to intense scrutiny. ![]() The popular Chinese fitness app Keep is backed by Japan’s SoftBank and China’s Tencent and was looking to raise $500 million, sources told FT. IPO endeavors as Beijing intensified its policing of technology platforms in China. The news of LinkDoc ran parallel to the decision by Keep to pull its $500 million U.S. public listings are not forbidden, the move by LinkDoc is expected to spark a pull-out by additional Chinese companies with U.S. The move by officials prompted investors to unload Chinese stocks listed in the U.S.Īnalysts told Reuters that despite the fact that U.S. LinkDoc is likely the first Chinese startup to have retreated from its IPO plans as China’s regulatory agencies stepped up Big Tech oversight. The move against Didi from Chinese regulators came just two days after it went public in the U.S. Sources told Reuters that LinkDoc was in the midst of filing for a $211 million initial public offering (IPO) in New York but scrapped the plans after Beijing pulled Didi from app stores and from payment platforms WeChat Pay and Alipay. Medical data firm LinkDoc Technology and digital fitness platform Keep have both pulled out following regulators’ probes into ride-hailing giant Didi Global, according to separate reports from the Financial Times and Reuters on Thursday (July 8). in light of China’s crackdown on domestic companies looking to list overseas. Two Chinese startups suspended public listing plans in the U.S.
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