Chinese ride-hailing service Didi says it lost $5.5 billion in recent years ahead of its U.S. stock market debut Wednesday however it’s pushing its global reach and interests in developing electric and self-driving vehicles.
The Beijing-based company operates in 16 countries; however 90% of the 493 million customers who utilized the service at least once in the last year are in China.
Didi Global Inc. intended to raise up to $4 billion by selling 288 million shares on the New York Stock Exchange at $13-$14 each. It said 30% will be spent on technology improvement, another 30% to grow outside China and 20% on new products.
The company established in 2012 by Will Wei Cheng, a veteran of e-commerce business giant Alibaba Group, says it intends to turn into the “world’s biggest one-stop transportation platform” and operator of vehicle networks.
“We try to turn into a really global technology company,” said Cheng and President Jean Qing Liu in the prospectus. Liu is a former Goldman Sachs managing director and the little girl of Liu Chuanzhi, founder of computer manufacturers Lenovo Group.
Early investors included Apple Inc., Japan’s Softbank, Alibaba and Chinese internet giants, Tencent Holding Ltd. also, Baidu Inc.
Didi bought rival Kuaidi in 2016 and Uber Technologies Inc’s. China operations the following year, finishing a fight in which the American company said it was losing $1 billion every year.
China’s crowded ride-hailing market has gone through unexpected changes as the ruling communists coalition attempts to sustain advancement of technology while keeping control of promising ventures.
Established as a smart phone-based taxi-hailing service it launched ride-hailing in 2014 and extended abroad in 2018 by procuring Brazil’s 99 Taxis and setting up services in Mexico.
In 2015-16, regulators tightened control in what state media said was a push to check gridlock and forestall wrongdoing connected to ride-hailing services. Drivers were required to be inhabitants of urban communities and towns where they worked and to be all the more firmly directed.
Didi has furrowed cash into improvement of self-driving, electric vehicles and other technologies. The company launched an electric vehicle last year with Chinese automaker BYD Auto, a unit of BYD Ltd. Didi lost 15 billion yuan ($2.3 billion) in 2018, 9.7 billion yuan ($1.5 billion) in 2019 and 10.6 billion yuan ($1.6 billion) last year, as per its prospectus. It says Didi had $3 billion in cash as of Dec. 31.
