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Abu Dhabi, UAESaturday 23 June 2018

Exclusive: Didi, world’s biggest ride-hailing company, in no hurry for IPO

Didi Chuxing says it is well capitalised and not pressured by shareholders for a public listing

Jean Liu president of Didi and Stephen Zhu vice president of strategy, have big plans for China's global ride sharing company which handles 25 million rides per day, but an IPO isn't paramount. Chris Whiteoak / The National
Jean Liu president of Didi and Stephen Zhu vice president of strategy, have big plans for China's global ride sharing company which handles 25 million rides per day, but an IPO isn't paramount. Chris Whiteoak / The National

The ride-hailing service Didi Chuxing, which counts Apple, Japanese SoftBank Group along with Abu Dhabi’s Mubadala Investment Company as its shareholders, is well capitalised and under no pressure from the stakeholders to list its shares in the near future, according to the top executives at the company.

“There is no immediate pressure from the outside [to do the share float]," Didi’s President Jean Liu told The National in Abu Dhabi. “Most of our investors, I would say, are very visionary and they are also quite patient plus we are still only five-years-old [company] so it’s still a young investment for a lot of them.”

An earlier Reuters report suggested China-based Didi is working toward an initial public offering (IPO) in the US that would likely take place in 2018. Based on the news agency's report, Didi would have had a $50 billion value, which would have made it as the most high-profile listing of a Chinese company in the US, since Alibaba Group Holding IPO.

Ms Liu, however said for Didi, the focus is expanding and strengthening the business and forging new partnerships across the globe. “We feel quite fortunate that we can focus on what we are doing on business itself.”

A share sale, is “a means rather than a goal...from our perspective [an] IPO is not a purpose,” Stephen Zhu, Didi’s vice president of strategy explained during the joint interview. “Right now we are very well capitalised and we have enough [financial] resources to execute our strategy for next few years,” he said. “We are not in a rush.”

Didi, the world's largest online transportation platform with more than 450 million users and 21 million drivers, completed its latest funding round in July raising more than $5 billion from investors including Mubadala, which invested through SoftBank Group, Zhu said without divulging the size of individual investments.

The company, Ms Jean said, does not have specific funding plans in 2018.

“Even for the last [funding] round, we weren’t planning for that,” she said, adding that, the investments followed a meeting between the company and the SoftBank’s Masayoshi Son. “He is so passionate about what we are doing……. he shared with us his dream and we shared with him ours so it naturally clicked and fund raising happened,” she said.

The company, however, is open to partnerships.

“It’s a very young company and it’s a fascinating industry that is growing really fast so there are a lot of different parts of strategic partnerships,” she said. “In China we have Alibaba and Tencent, in one space we have Apple, in overall industry SoftBank is very good strong partner with us,” she noted.

The company, which dominates the ride-sharing market in China, has an investment in every single region around the world. It has investments in Taxify which operates in Europe and Africa; Latin America through 99 and in the US, Didi is an equity-holder in both Uber and Lyft.

Through Careem, Didi has expanded its footprint in the Middle East, however the company is also looking for other investment opportunities in the future.

“Everything is possible. It really depends on many different conditions but we are a company which is very open minded,” she said, when asked if Didi would consider increasing its stake in Careem. “it’s one of the options we have”, but there are no immediate plans for that, she added.

Through its operations in China and it's investment portfolio, Didi reaches 60 per cent of the global population in 1,000 cities across the world. The company does not only operate in the traditional ride-sharing business, it has an intelligent traffic management system that helps reduce congestion through machine learning.

The company is also setting up vehicle management companies to better manage cars and is also partnering with automakers to design and build cars for ridesharing purposes, according to Mr Zhu.

For the next five years Didi's strategy is the rideshare network itself. The rides it completes on daily basis account for two out of three rides globally. “Basically, the number of rides we complete are twice the size of other markets added together. That’s the scale of us,” Ms Jean said, adding that the company’s penetration in the Chinese market is still 1 per cent to 2 per cent: very low so that’s one area of the business where we “are still working really hard to improve”.