China carpooling player Dida pursues Hong Kong IPO
Dida Chuxing – a Chinese peer-to-peer carpooling business that subsequently expanded into ride-hailing, putting it in direct competition with longstanding market leader Didi Chuxing – has filed for a Hong Kong IPO.
Nio Capital, an investment manager controlled by Chinese electric vehicle manufacturer Nio, is the largest external shareholder with a 21.6% stake. IDG Capital owns 10.23% and China Renaissance Capital Investment (CRCI) has 7.15%. Other investors include Hillhouse Capital, Trustbridge Partners, Lupin Capital and Mousse Partners, as well as strategic players Bitauto, Ctrip, and JD.com.
Dida has raised around $200 million across five funding rounds, according to a prospectus. AVCJ Research’s records show the company received $30 million from IDG and Bitauto in 2014 and then a $100 million Series C – led by CRCI and also featuring Trustbridge, IDG and Bitauto – in 2015. The two most recent rounds, worth RMB550 million ($82 million), mostly came from Nio Capital.
Founded in 2014, Dida claims to be the largest carpooling marketplace in China with a 66.5% market share based on the number of rides completed in 2019. As of June, it had 19.2 million registered private car owners in 366 cities and had served 36.7 million carpooling riders since inception. In 2019, the company facilitated 179 million rides.
Frost & Sullivan estimates that China’s carpooling industry will be worth RMB113.9 billion by 2025, up from RMB14 billion in 2019. However, the penetration of carpooling as a share of total distance covered by private passenger cars will only rise from 0.19% to 1%. Dida’s app-based platform connects riders with similar travel itineraries, alleviating China’s growing congestion issues.
The company entered the smart taxi services space in 2017, focusing on online hailing and optimized roadside-hailing. It is the second-largest mobility platform in China based on the number of taxi rides, with online hailing services available in 86 cities. It facilitated 110 million taxi rides in 2019. Dida has also developed cloud-based software that allows taxi companies to streamline fleet management.
Most of the revenue comes from service fees charged to private car owners who source carpooling passengers through the platform. The company only started charging service fees to taxi drivers in August 2019. Revenue reached RMB580.6 million in 2019, up from RMB117.6 million a year earlier. Over the same period, the net loss narrowed from RMB1.67 billion to RMB755.8 million following a substantial drop in the subsidies paid to drivers and riders.
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