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Didi prepares for overtaking US stock market to become “truly global”

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Shares of China’s largest vehicle will begin trading on Wednesday in New York, the company announced. Didi traded its shares at $ 14 a piece, raising $ 4.4 billion and making it the largest Chinese IPO since the United States. D’Alibaba $ 25 billion bid in 2014, according to Dealogic.

The deal values ​​the company at more than $ 67 billion.

Didi, that forced Uber out from mainland China five years ago, appears on Wall Street at a delicate time. The company has attracted scrutiny from regulators in China, where the technology sector is undergoing a process historical repression.
In April, the ride-hailer was one of the 34 companies convened for a meeting with the State Administration for Market Regulation (SAMR), where executives were told to put an end to any anti-competitive behavior and were ordered to conduct internal inspections.
This month, Reuters reported that Didi was being investigated for antitrust issues. According to the report, which cited anonymous sources, SAMR was investigating Didi about whether he had “used competitive practices that unfairly eliminated smaller rivals.”

Didi said in a statement at the time that he “would not comment on unsubstantiated speculation from unnamed sources.” SAMR did not respond to a request for comment from CNN Business.

The company is also making a shock in New York amid significant US-China tensions.
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While many major Chinese technology companies market in the United States, including Alibaba (BABA) i JD.com (JD), the environment has become more volatile in recent years. Recently, a group of Chinese companies listed on Wall Street has been maintained secondary offers in Hong Kong so they can establish stronger roots closer to home, with some citing worsening regulatory barriers in the United States. Some, like China Mobile and China Telecom, has been kicked off American exchanges altogether.

Despite the tensions, in 2020 it still recorded about $ 12 billion raised by Chinese companies on U.S. lists, according to data provider Refinitiv. Chinese companies have raised nearly $ 8 billion so far in 2021, more than triple the amount reached at the same point last year.

Didi is emblematic of both trends. His next debut will mark one of the top ten U.S. charts of the last decade, as well as the fourth U.S. IPO of a registered Chinese company, according to Dealogic.

But in recent months, the company has also considered a double listing in Hong Kong, according to a person familiar with the matter.

A Chinese champion

Didi is ubiquitous in China and boasts 377 million annual active users only in the country.
The company was founded in Beijing in 2012 by former Alibaba manager Cheng Wei, who set up a taxi service provider known as “Didi Dache,” which means transporting taxis in Mandarin.
Didi quickly gained the support of heavyweights included apple (AAPL), SoftBank (SFTBF) i Alibaba (BABA), despite defending himself from rivals. In 2015 it acquired its main local competitor, Kuaidi Dache, which effectively provoked an opponent horse out of the race. The new combined company changed its flagship app to Didi Chuxing shortly after.
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In 2016, Didi too bought Uber’s The Chinese business, which puts an end to the presence of the American firm there. Former Uber CEO Travis Kalanick recognized Didi as “a fierce competitor” and agreed that companies change their stakes. (Didi left his position at Uber (UBER) at the end of last year. Uber retains a 12% stake in Didi.)
Since then, Didi has managed to offer a range of services, including bicycle transport. carpooling services.

The company now presents itself as the world’s largest mobility platform, with users in China and 15 other countries, including Brazil, Mexico and Russia.

But it is still heavily dependent on its domestic market: more than 93% of its sales come from China.

The company wants to change that. In a Presentation of the Securities and Exchange Commission, Didi said he planned to use a third of the money he raises to expand his footprint outside of China.
“We aspire to become a truly global technology company,” wrote Will Wei Cheng and Jean Qing Liu, who hold the position of CEO and President, respectively. letter to investors.

Another third of the funding will be used to develop its technology in areas such as electric vehicle and autonomous driving. The rest will be used to create new products or services or other strategic investments. In their letter, Cheng and Liu said the company was exploring new launches in areas such as “transporting goods within the city, buying community groups and delivering food.”

Autonomous robotaxi is taking off in China

Like many emerging companies, Didi has struggled to make a profit for years, despite earning billions of dollars in revenue.

Finally, he managed to change that this year, earning a net income of approximately $ 800 million for the quarter ended March.

“Didi is a fantastic industry-leading innovator,” Jim Breyer, founder and CEO of Breyer Capital, an investor, told CNN Business in an email. “I have the privilege of watching his leadership since I invested a few years ago and look forward to his next growth chapter.”

The company plans to list on the New York Stock Exchange under the symbol “DIDI”.

– CNN’s Beijing office, Julia Horowitz, Pamela Boykoff, Jill Disis and Diksha Madhok contributed to this report.

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