Didi Chuxing Technology, China’s largest ride-hailing service, said it will invest US$1 billion in its auto services business as it prepares for a widely anticipated initial public offering (IPO), Reuters reports.
Didi’s services business, which includes auto leasing, car maintenance and gas station services, has gross merchandise value (GMV) sales of 60 billion yuan (US$8.79 billion), the company said.
The unit will be consolidated under its new business Xiaoju Automobile Solutions Co., it added.
“Building on our service to 30 million Didi drivers, we will strive to develop a leading one-stop auto solutions platform capable of winning the highest trust of car users,” said Kevin Chen, who heads Xiaoju.
Didi’s IPO is expected to be launched as early as next year, according to people familiar with the plans. However, the company has not yet confirmed plans for the listing.
The share offering would be one of the biggest in recent years; the company was valued at US$56 billion at its last fundraising round in 2017.
Last month, sources told Reuters that Didi’s car services unit is worth about US$2 billion to US$3 billion, and that there are plans to spin it off from Didi’s main business before a potential listing.
The company started offering auto services in 2015, but it launched a platform that unified the services in April this year.
Didi expects Xiaoju’s annualized sales to exceed 90 billion yuan (US$13.17 billion) by the end of 2018, and it is currently operating in 257 cities with roughly 7,500 partners and distributors.
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