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Ride-hailing Company Dida Chuxing Seeking up to USD 300 Million in Pre-IPO
Ride-hailing Company Dida Chuxing Seeking up to USD 300 Million in Pre-IPO
Woman sleeping in the taxi. Image Credit: Dida Chuxing
Associated Company
Didi Didi

Beijing-based ride-hailing service provider Dida Chuxing (嘀嗒出行) is on the hunt for more capital – up to USD 300 million – and is considering the possibility of an initial public offering, according to people familiar with the matter (Bloomberg).

The ridesharing company is looking to expand its business and increase its market share in China, where the market is dominated by the rival Didi Chuxing, which raised USD 600 million in June of last year, from Tokyo-based carmaker Toyota Motor Cooperation.

Despite being backed by renowned names like EV carmaker NIO (蔚来) and Beijing-based investment firm IDG Capital, Dida still have a long way to go to cut through the competition.  

Didi Chuxing, which drove Uber out of China in 2016, became the 'unbeatable' dominant player on the ride-hailing market. Backed by internet giant Tencent (TCEHY: OTC), the ridesharing company has a substantial presence in first and second-tier Chinese cities and takes more than 90% of market share. Nevertheless, the firm has raised a total of over USD 20 billion in funding.

However, an eventual IPO might help Dida to put further pressure on Didi. Furthermore, in the past two years, Didi has been striving to maintain its number one position. In 2018, the company had to suspend some of its carpooling services after the murder of two female passengers, which raised concerns about passenger security when booking unknown drivers and sharing cars with strangers. In the end, a former driver was sentenced to death for the crime, and Didi later introduced multiple new safety features, including emergency calling and driver verification.

In 2019, Tencent-backed Meituan Dianping (美团点评, 3690: HK), one of the largest lifestyle services providers in China – whose offerings include food delivery, movie tickets, and flights – made a provocative move, which can also be understood as a direct challenge to Didi, by adding ride-hailing services into its platform for its 320 million active users. Meituan started to allow some Beijing-based rental companies, like Shouqi Limousine & Chauffeur (首汽约车) and Geely-owned Caocao Chuxing (曹操出行) on its app.

Other threats to the 'Didi monopoly' surged when e-commerce giant Alibaba, jointly with Tencent and other carmakers, formed a ride-hailing Joint Venture (VC), which lighted up more 'fire' under the industry. They have invested USD 1.5 billion in this new ridesharing company, according to Reuters.

How Dida will make it through the competition in this turbulent market, with more rivals pouring a large amount of capital and investment, is still unclear.  It’s a daunting task, particularly with the entrance of mapping service provider Gaode (高德地图) which registered 700,000 daily rides last year (link in Chinese). 

The Chinese ride-hailing market is considered to be the largest in the world, generating over USD 53 billion in revenue, with 36% of user penetration in 2018. With more e-commerce platforms and new companies joining the ridesharing market, it is expected that the revenue segment will reach over USD 75 billion by 2021 and increase to nearly USD 100 billion in 2023, according to Statista.

Editor: Luke Sheehan

Enterprise Information

A one-stop mobile travel platform
CATEGORIES: AI, Auto Travel, Finance, Computer Vision, Autonomous Driving, Technical Travel, Natural Language Processing, O2O, Big Data, Sharing Travel, Business Car, Mutual Insurance, Manufacturing, Emerging Technology and Application, Auto Traffic, Auto Rental, Car-owner Service, Travel Service, Public Traffic, OFO, Auto Big Data
Last Funding Type
Strategic Investment
Number of Employees
10001-50000
Number of Funding Rounds
20

Enterprise Information

Didi
A one-stop mobile travel platform
CATEGORIES: AI, Auto Travel, Finance, Computer Vision, Autonomous Driving, Technical Travel, Natural Language Processing, O2O, Big Data, Sharing Travel, Business Car, Mutual Insurance, Manufacturing, Emerging Technology and Application, Auto Traffic, Auto Rental, Car-owner Service, Travel Service, Public Traffic, OFO, Auto Big Data
Last Funding Type
Strategic Investment
Number of Employees
10001-50000
Number of Funding Rounds
20

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