DiDi Chuxing: The Chinese Ride-Sharing Giant

Ride-sharing and ride-hailing services are becoming increasingly popular among commuters. And their popularity is poised to rise even more. In fact, the number of ride-sharing users is estimated to grow at a compounded annual growth rate of 16.6% by 2026.

Some of the biggest names in this industry include Uber and Lyft. But there is a growing list of names that are trying to gain a foothold in the global market, including China's DiDi Chuxing. This article looks at a brief history of the company including its financial backers, key mergers, management, as well as its financial prospects for the future.

DiDi Chuxing: An Overview

DiDi Chuxing is a mobile transportation company headquartered in Beijing. Known simply as DiDi, it is now one of the world's largest ride-hailing companies, serving more than 493 million users across Asia-Pacific, Africa, Latin America, Central Asia, and Russia.

DiDi was founded in 2012. Founder Cheng Wei, who named the company DiDi Dache, intended it to be a smartphone app for people who wanted to immediately hail cabs. Since then, it expanded to offer a broad range of services for travelers beyond taxis, including private cars, car rentals, buses, and chauffeurs, as well as delivery services, and bike-sharing. The company uses new technologies such as artificial intelligence to deploy its resources more efficiently.

Since its creation, the company has raised more than $23.2 billion in 26 rounds of funding before it went public via an IPO in June 2021. The company has also made strategic investments in other global companies such as Lyft, Bolt, and Grab.

DiDi Chuxing has almost 13,000 corporate employees around the world as of 2022 and dominates the Chinese ride-sharing market.

DiDi's Management Ranks

The management team behind Didi's success boasts alums from Goldman Sachs, Alibaba, and other major enterprises.

Will Wei Cheng is DiDi's founder and chief executive officer (CEO) and has extensive technology experience. After graduating from Beijing University of Chemical Technology, Wei held several jobs before joining the Chinese e-commerce giant Alibaba. Over eight years, he worked his way up to become vice president for Alibaba's online payment service, Alipay. 

Jean Qing Liu is the company's director and president. She joined the company in 2014 and has played a key role in DiDi's rapid growth. She has an undergraduate degree in computer science from Peking University and a master's degree in computer science from Harvard. Before joining DiDi, she worked for Goldman Sachs for more than a decade and became managing director in Asia for the investment bank.

DiDi Was Built on Mergers

DiDi has undergone a series of key mergers and acquisitions (M&A) since 2012—most notably with key rivals who vied for market share in China. According to Crunchbase, DiDi had made five acquisitions by 2018.

Reuters reported that DiDi was locked in a price war with rival Kuaidi Dache, resulting in major losses for both companies. While DiDi claimed about 55% of the Chinese market, Kuaidi controlled much of the remaining 45%. The 2015 merger resulted in one of the largest ride-sharing apps, with the newly-formed combined company valued at about $6 billion at the time.

DiDi also competed aggressively against international companies that tried to corner the Chinese market including Uber China. After Uber lost an estimated $2 billion in a market share battle, it brokered a truce with DiDi. Uber China sold its business to Didi and became a minority investor. DiDi, in turn, invested $1 billion in Uber as part of the deal.

DiDi has also made key investments in other companies, including $100 million in Lyft, Uber's major rival, forming a partnership to share technologies and marketing expertise.

DiDi's Early Investors

DiDi had raised a significant amount of capital to expand through 26 rounds of financing before it went public. The company has a total of 48 investors, 14 of which are considered lead investors.

The last was a debt financing round on April 9, 2021, which consisted of six investors. These names included:

• Morgan Stanley
• JPMorgan Chase
• HSBC
• Goldman Sachs
• Citi
• Barclays

Together, these names invested a total of $1.5 billion in DiDi.

DiDi also raised $500 million from SoftBank and another company called For Good Ventures in a venture round of financing in May 2020. Toyota invested $600 million in July 2019 in a corporate round of financing.

DiDi Goes Public (and Then Delists)

DiDi went public in an initial public offering (IPO) on June 30, 2021, when shares began trading on the New York Stock Exchange (NYSE) under the ticker symbol DIDI. The company sold 316.8 million American Depositary Shares (ADS), raising a total of $4.4 billion or $14 per share.

The offering was larger than expected because the IPO was oversubscribed—DiDi originally intended to sell 288 million shares—making it the largest listing by a Chinese company in the United States since Alibaba went public in 2014.

Post-IPO Delisting

Since DiDi went public in June 2021, its shares have dropped significantly from its $14 IPO price to around $4 per share as of February 2022. Part of these losses also stems from the company's about-turn announcement to de-list its shares from American exchanges in December 2021, under pressure from the Chinese government to do so. Instead, the company will re-list on the Hong Kong Stock Exchange. The de-listing remains an ongoing matter and it is unclear if an ADR will exist following the eventual de-listing.