China’s Didi leans towards New York over Hong Kong for IPO

didi chuxing

China’s top ride-hailing firm Didi Chuxing is leaning toward picking New York over Hong Kong for its initial public offering (IPO), eyeing a valuation of at least $100 billion via the float, sources have confirmed.

The sources also added that Didi has also discussed the option of listing via a special-purpose acquisition company (SPAC) preferring to a blank-check firm with capital raised in a U.S. IPO that would then merge with a target.

A separate person close to Didi said the company is also considering a second listing in Hong Kong if its U.S. IPO takes place.

Beijing-based Didi, which is backed by technology investment giants SoftBank, Alibaba and Tencent, said it doesn’t have a definite plan regarding its listing destination nor timeline.

The sources also said the preference for New York as a listing venue partly reflects concerns that a Hong Kong IPO application could run into tighter regulatory scrutiny over Didi business practices, including the use of unlicensed vehicles and part-time drivers.

Shanghai authorities fined Didi for using unlicensed vehicles multiple times in 2019. Back then, Didi responded by launching a campaign to improve safety for passengers.

Another advantage Didi sees in a New York IPO is a more predictable listing pace and a deeper pool of capital as soon as the second quarter referring to the momentum now lifting U.S. stock markets.