Didi launches blockbuster US IPO in quest to go ‘truly global’

Didi went public Wednesday in the biggest US share offering by a Chinese company since Alibaba debuted in 2014.  Stock in China’s biggest ride-hailing service started trading in New York at about…

$16.65, a nearly 20% jump from its initial public offering price of $14 a share.

Didi raised $4.4 billion from the stock sale, making it the largest Chinese IPO in the United States since Alibaba’s $25 billion offering in 2014, according to Dealogic.

At its opening price, Didi is valued at more than $80 billion.

Political and regulatory headaches

Didi, which forced Uber out of mainland China five years ago, is listing on Wall Street at a delicate time. The company has attracted scrutiny from regulators in China, where the tech sector is undergoing a historic crackdown.

In April, the ride-hailer was one of 34 companies summoned 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 ordered to carry out internal inspections.

This month, Reuters reported that Didi was being investigated for antitrust concerns. According to the report, which cited anonymous sources, Didi was being probed by SAMR about whether it had “used any competitive practices that squeezed out smaller rivals unfairly.”

Didi said in a statement at the time that it 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 splash in New York amid significant US-China tensions.

While many major Chinese tech firms trade in the United States, including Alibaba (BABA) and JD.com (JD), the environment has gotten more volatile in recent years. Lately, a flurry of Chinese companies listed on Wall Street have held secondary offerings in Hong Kong so they can establish stronger roots closer to home, with some citing worsening regulatory hurdles in the United States. Some, like China Mobile and China Telecom, have been kicked off US exchanges altogether.

Despite the tensions, 2020 still saw some $12 billion raised by Chinese companies from US listings, according to data provider Refinitiv. Almost $8 billion has been raised by Chinese firms so far in 2021, more than triple the amount reached at the same point last year.

Didi is emblematic of both trends. Its upcoming debut will mark one of the top 10 US listings over the past decade, as well as the fourth-largest US IPO by a Chinese company on record, according to Dealogic.

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

A Chinese champion

Didi is ubiquitous in China, boasting 377 million annual active users in the country alone.

The company was founded in Beijing in 2012 by former Alibaba manager Cheng Wei, who created a cab service provider known as “Didi Dache,” which means taxi-hailing in Mandarin.

Didi rapidly won the backing of heavyweights including Apple (AAPL), SoftBank (SFTBF) and Alibaba (BABA), while also fending off rivals. In 2015, it acquired its top local competitor, Kuaidi Dache, effectively knocking an opposing horse out of the race. The new combined company rebranded its flagship app to…

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