China’s Leading Ride-Hailing Company Sets Sights Higher

DiDi Chuxing Expands Its Offerings

DiDi Chuxing, the Chinese ride-hailing startup which filed to list in the US last week, wants to do more than provide users with rides. It is offering a growing number of services to its 493 million annual active users. The ride-hailing startup is aiming to become a mobile platform for everything from booking rides to getting gas. It is a strategy already embraced by Alibaba’s (BABA) Alipay. Its main business is mobile payments, but it also lets users purchase airline tickets and pay utility bills.

Ride-hailing is by far DiDi’s main revenue contributor, but its “other initiatives” are starting to expand. For the first quarter this growing segment represented 5% of the company’s total revenue—up 1.2% since 2018.

DiDi Won’t Lack the Capital

DiDi will not lack the capital necessary to expand into personal finance, bike-sharing, and other services like moving given that its IPO is expected to be the largest public tech debut of 2021. The company, which filed under its official name Xiaoju Kuaizhi, did not say which exchange it will list on in the US or how much it is seeking to raise.

Nonetheless, the IPO is expected to be huge, given the company’s valuation stood at $62 billion the last time it raised capital in August. DiDi could end up with a value of as much as $100 billion when it goes public. The company is backed by SoftBank (SFTBY), Alibaba, and Tencent (TCEHY).

PS: SoftBank is an investor in SoFi.

Bikes, Financial Services Driving Growth

In DiDi’s IPO prospectus the company said bike and e-bike sharing were the biggest drivers of “other initiatives” sales. It also includes automobile leasing, freight delivery, and financial services in that category. Personal finance was not called out in the prospectus, but DiDi is focusing on that too.

Last summer, its fintech unit DiDi Finance inked a partnership with Bank of Shanghai to provide digital personal finance products. It also teamed up with China Merchants Bank to support credit card payments and installment purchase plans for rides. Another DiDi unit partnered with Ping An Insurance. The world is becoming more digital and DiDi wants to be a major player in that shift. As the leading ride-hailing service in China it may be able to pull this off.

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