Didi-Kuaidi in high gear for US IPO in June 2015
The newly formed Didi-Kuaidi taxi app mega merger is racing to make a US IPO as early as June 2015 in order to catapult itself to a stage of high-speed growth.
The newly formed Didi-Kuaidi taxi app mega merger is wasting no time in building up resources, racing to make a US IPO as early as June 2015 in order to catapult itself to a stage of high-speed growth.
The Didi Taxi Kuadidache merger on February 14 was the largest taxi app merger in China so far. Didi Taxi and Kuaididache that are worth a combined US$6 billion held 56.5% and 43.3% respectively of China’s 172 million-user taxi app market. An industry observer said taxi apps with an O2O business model are extremely sought after in the US stock market, evident by Uber’s enormous IPO. Didi-Kuaidi is bound to have a very smooth US IPO, given its advantages of a gigantic market share and innovative potential in the mobile trip sector.
To prepare for a US IPO Didi-Kuaidi has been actively recruiting personnel and raising funds. Didi Taxi CFO Tao Xu recently posted recruitment ads on popular social/dating app Momo, offering “competitive remuneration and equity incentive schemes” to recruit an auditing manager with more than eight years experience working in a listed company or any one of the four major global auditing firms. It is also recruiting an executive legal manager with US law schools’ LLM or RD qualifications and more than eight years’ experience in a major firm.
Slated only four months after its landmark merger, Didi-Kuaidi’s rumored IPO is an indication of the sheer executive capacity of the new company. In a leaked internal email by Kuadidache
CEO Chuanwei Lu, he said Kuaididache would continue to recruit talents this year to ‘finally do what we always wanted to do'. He also said in the same email that an IPO was brought forth on the agenda after the merger with Didi Taxi.
Didi Taxi CEO Weize Cheng had also said previously: “In six months, Didi Taxi will take on a whole new challenge, and six months after that we will have the results to show for it.” As it turns out things may be moving even faster than anticipated.
Didi Taxi and Kuaididache both came to the table with substantial funds, raised prior to the merger –Didi brought US$600 million and Kuaididache brought US$700 million. The merger put an end to their vicious rivalry, and it will be even more powerful after a successful US IPO.
Didi-Kuaidi launched a chauffeur service incentive campaign on March 21 that offers as much as RMB1 billion in giveaways. Didi-Kuaidi is hoping to take over the car hire segment with their well-used strategy of subsidies, but Uber and Yongche have formed an alliance as a counter force. Didi-Kuaidi was the first to fire off a salvo of subsidies in response to the Uber and Yongche linkup and is also setting its sights on overseas expansion in a bid to take the war to Uber’s own turf.
Uber currently has US$5.9 billion in its war chest, backed by an estimated market valuation of US$40 billion. Taking on such fast a growing and formidable opponent requires ample funds that Didi-Kuaidi is eager to get with an IPO. (Translation by David)