Chinese ride-hailing company Dida Chuxing is looking to raise up to USD 300 million in a pre-IPO round, as reported by Bloomberg, citing people familiar with the matter.
Dida has started to raise capital since August 2019, according to Chinese media outlet Jiemian. The company, which already has mulled floating on exchanges in mainland China and Hong Kong, but prefers the latter, is expecting its market capitalization to reach USD 3 billion after completing this round, sources said.
The average daily order volume for IDG Capital backed-Dida has reached 1 million, while hitchhiking services accounted for 70%, the same source disclosed. He said the new round of financing will be used to increase Dida’s daily order volume, and fulfill the goal of 2 million daily orders in 2020.
Dida declined to comment on this issue when contacted by Jiemian.
Founded in 2014, Dida offers taxi-hailing and hitchhiking services to passengers. The company is considered as Didi Chuxing’s main rival in China. It gained further popularity after Didi suspended its carpooling service due to two murders committed by its hitchhiking drivers. Dida claimed to have 130 million users and over 15 million drivers registered on the platform by the end of September 2019.
The company completed its Series D round of financing led by Nio capital, the investment arm of Chinese electric vehicle startup Nio, in March 2017. However, the amount of the investment was not disclosed. Prior to this round, Dida completed three rounds of financing raising a total amount of USD 150 million. Li Bin, Nio’s founder and CEO, has been Dida’s chairman of the board since 2018.
Dida says it became profitable in September last year, according to its CEO Song Zhongjie. The firm’s used-car trading businesses, advertising, and car maintenance, have achieved profitability, and will help supplement losses in the firm’s ride-hailing business, said Song.
The online ride-hailing market in China has grown steadily from 2015 to 2018, with an annual compound growth rate of 50%, according to Chinese data consultancy firm Analysys. Hitchhiking was ranked as the third-largest business sector in the ride-hailing market, with a market size of RMB 48.6 billion (USD 6.9 billion).