China's Didi Chuxing IPO priced at $14... Competing with Uber for No.1

Confirmed Ahead of Listing on New York Stock Exchange on the 30th
Estimated Corporate Value Approximately 79 Trillion Won

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Didi Chuxing, the Chinese version of 'Uber,' which is about to be listed on the New York Stock Exchange, has finalized its offering price at $14 per share. Based on the offering price, Didi Chuxing's corporate value is approximately $70 billion (about 79.2 trillion KRW), and with this listing, Didi Chuxing is expected to compete with Uber for the top position in the ride-sharing service market.

According to the Wall Street Journal (WSJ) on the 29th (local time), Didi Chuxing set the offering price at $14 per share ahead of its listing on the New York Stock Exchange on the 30th. This is the upper limit of the previously set offering price range. Although Didi Chuxing did not disclose the official number of shares offered, industry sources indicate that about 288 million shares will be offered, raising a total of $4 billion. This is the largest scale of an initial public offering (IPO) by a Chinese company on the U.S. stock market since Alibaba, a Chinese e-commerce company, raised $25 billion in 2014.

Through this listing, Didi Chuxing is expected to intensify competition with Uber, the world's number one ride-sharing market leader. Reflecting the offering amount, Didi Chuxing's corporate value is $70 billion (about 79.2 trillion KRW), which is somewhat below Uber's current market capitalization of $95.6 billion, which entered the New York Stock Exchange in May last year, but it has significantly surpassed another competitor, Lyft (about $20 billion).

Didi Chuxing announced that it plans to use 30% of the funds raised through this IPO to expand into markets outside China. Additionally, 30% will be invested in technologies such as shared travel, electric vehicles, and autonomous driving, 20% will be allocated to new product launches and product category expansion, and the remaining 20% will be used for operating funds and potential strategic investments.

With Didi Chuxing's listing on the New York Stock Exchange, SoftBank Chairman Masayoshi Son is expected to be the biggest beneficiary. SoftBank's Vision Fund, operated by Chairman Son, holds a 21.5% stake in Didi Chuxing. Uber holds 12.8%.

Meanwhile, Didi Chuxing, founded in June 2012 in Beijing, started as a ride-sharing service and has expanded its business areas to food delivery, autonomous vehicle development, and electric vehicle charging stations. It currently provides ride-sharing services in 4,000 cities across 15 countries.