Dada Group to Go Public on NASDAQ
Chinese e-commerce giant JD.com holds 51.4% shares of the company as its largest shareholder with Goldman Sachs and other renowned firms joint book-runners on the deal.
►Dada plans to raise USD 100 million from the IPO.
►It is now the leading local on-demand delivery platform in China by number of orders.
Dada Group, a Chinese instant retail and distribution platform that started off in Shanghai, plans to go public in the United States.
Today the firm submitted an F-1 prospectus to the US SEC, and plans to be listed on Nasdaq under the trading symbol ‘DADA,’ and plans to raise up to USD 100 million through an initial public offering.
The firm decided not to disclose the issue price range of the fundraising and other related information. What it did disclose was that the funds raised will be mainly used for investment in technology, R&D, implementation of marketing plans and expansion of the user base, as well as general corporate purposes.
Dada's listing is a routine choice for a company to start a business for more than 5 years. This is an important step that a company must take after its establishment, model verification, and scale expansion. After the listing, Dada will inevitably start the company's second stage of development in terms of strategic tasks such as continued expansion of scale, business innovation, and overall profitability.
With firms such as Luckin Coffee and GSX Techedu counterfeiting incidents that have cast a shadow on the business reputation of the Chinese stock market, and as the impact of the epidemic continues, and is still expanding in the US, it seems to be a time that could hardly be more serious. Dada, a leading local instant retail and distribution platform, has nevertheless decided to choose to go public in the US.
Dada Group was established in 2014 and has received investments from Sequoia, DST, JD.com, Wal-Mart and other strategic partners, with a total financing amount of approximately USD 1.3 billion.
In October 2016, JD.com merged with Dada, becoming the single largest shareholder of the new company in exchange for about 47.4% of the business, business resource access and USD 200 million in cash.
After the merger, the new company was divided into two businesses: a crowdsourcing logistics platform and a supermarket fresh O2O platform. Dada took charge of the take-out platform, crowdsourcing logistics for offline merchants and home delivery for supermarkets.
Dada is now a leading local on-demand delivery platform in China by number of orders in 2019, according to market consultancy iResearch, the company said in the prospectus.
The data from the prospectus shows that in the year ending March 31, 2020, the total amount of commodity transactions of JD Daojia increased by 92.0% YoY to CNY 15.724 billion, and a total of 27.6 million active users contributed 134.7 million orders during this period.
In terms of Dada express delivery, as of December 31, 2019, the business covers more than 2,400 counties, regions and cities across the country, with a peak daily order volume of approximately 10 million orders. In the 12 months ending March 31, 2020, more than 634,000 riders delivered 822 million orders.
In the prospectus, Dada also disclosed the latest equity information. Before the initial public offering, Dada Group founder and CEO Kuai Jiaqi (蒯佳祺) held 8.3% of the shares, and co-founder and CTO Yang Jun (杨骏) held 1.7%. JD Group holds 47.4% of the shares, while Sequoia Capital China, Wal-Mart and DST hold 10.5%, 9.9% and 8.7% of the shares respectively. Hence JD.com is still Dada's most important business and strategic partner.