Image credits: DiDi Chuxing
News Article

DiDi's IPO is Coming, F-1 Form Prospectus Available

By Alejandro Enríquez | Thu, 06/17/2021 - 11:33

DiDi Chuxing shared the prospectus of the upcoming IPO F-1 form, setting the stage for one of the most expected IPOs of the year. "We believe in that world. In a "future mobility" world, where our cities are lovely and livable, and our lives are easier and better," wrote Didi’s Chairman and CEO Will Wei Cheng, and President Jean Qing Liu. The company's valuation remains unrevealed. While Financial Times estimated US$65 billion back in 2018, private parties gave Reuters a valuation closer to US$100 billion.

DiDi is present in 15 countries and has 493 million annual active users, 16 million annual active drivers and 41 million average daily transactions as of Mar. 31, 2021, according to the filings. The company has implemented ambitious mobility projects for each aspect of the Connected, Autonomous, Shared and Electric (CASE) trends reshaping the industry today and was named one of the 100 most influential companies by TIME Magazine. DiDi recently allied with Volvo Cars to deploy a fleet of autonomous vehicles in China, reported MBN.

The company is not only focusing on autonomous vehicles; electrification is also a key element of its growth strategy. "Mobility was a US$6.7 trillion market worldwide in 2020, but shared mobility and electric vehicle penetration were respectively 2 percent and 1 percent globally. The increasing adoption of electric vehicles and the commercialization of autonomous driving will further catalyze the growth of mobility, particularly shared mobility," says the filing. According to the founders the global mobility market is expected to reach US$16.4 trillion by 2040, by which time shared mobility and electric vehicles are expected to have reached 23.6 percent and 29.3 percent penetration, respectively.

DiDi's Growth Strategy in Mexico and Latin America

During the past three years, DiDi launched a global expansion strategy and ramped up operations in 14 countries, including Mexico, Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Panama, Peru and the Dominican Republic. The filing explains that the shared mobility market in Latin America, EMEA and APAC (excluding China and India) reached US$41 billion in 2020, and is expected to reach US$117 billion in 2025, representing a compound annual growth rate (CAGR) of 23.2 percent. "We have already achieved a strong market position as the second largest ride hailing platform in Latin America and second largest ride hailing and food delivery platform in Mexico, in terms of total transactions in 2020, according to CIC and iResearch," says the SEC filing.

DiDi is present in 34 cities in Mexico and has even tested new developments in the country, explained Andrés Panamá, CEO of DiDi México to MBN. “A clear example is DiDi Food, initially launched in Guadalajara, which is now present in three cities. We also launched DiDi Comparte, our carpool service, in Merida, allowing passengers to share trips with other users,” said Panamá.

DiDi has 333 employees in Mexico, who represent 2.1 percent of its global workforce and its SEC filing recognizes the importance of the country in its global strategy. "The Group derives the revenues principally from ride hailing services in overseas countries, including Brazil and Mexico. The Group also generates revenues from food delivery services in overseas countries," stated the company.

DiDi has also faced some challenges in Mexico as the country regulates ride-hailing platforms in 17 states, but some requirements vary from state to state. For instance, "transportation network companies may be required to periodically share information about drivers and vehicles registered on the platform, verify that they meet the requirements to operate in accordance with the regulations and make the payment of a duty equivalent to 1.5 percent of the total amount of each trip executed in the state,” says de filling.

Mexico’s Supreme Court has ruled that the imposition of excessive requirements on vehicle characteristics is unconstitutional and Mexican law prevents drivers to be classified as employees given the absence of a subordinate relationship.

You can read the full SEC F-1 Prospectus here.

Photo by:   DiDi Chuxing
Alejandro Enríquez Alejandro Enríquez Journalist and Industry Analyst