On the evening of October 8, Dida Chuxing, in which Chinese electric vehicle (EV) maker Nio (NYSE: NIO) holds a 17% stake, formally filed its prospectus with the Hong Kong Stock Exchange for a proposed public listing, which will be Asia's first ride-sharing IPO.

Dida Chuxing was founded in 2014, and its prospectus shows a total transaction value (GTV) of RMB11 billion in 2019, with a compound annual growth rate of 238%.

According to a report by the consulting firm Frost & Sullivan, Dida Chuxing ranked first in China's carpooling market in 2019, with a market share of 66.5%, and second in the taxi-hailing market.

According to the prospectus, as of June 30, 2020, Dida Chuxing already provides carpooling services in 366 Chinese cities with approximately 19.2 million registered carpooling owners and 9.8 million certified carpooling owners, with a cumulative total of 36.7 million passengers, according to the prospectus.

In 2017, 2018 and 2019, Dida carpooling GTV was approximately RMB700 million, RMB1.9 billion, and RMB8.5 billion, respectively, with year-on-year growth of 171.4% and 347.4% in 2018 and 2019, respectively.

In the taxi sector, as of June 30, 2020, Dida had provided taxi network services in 86 cities and established strategic partnerships with municipal or district-level taxi associations in 17 cities. The company completed 110 million net taxi ride orders in FY2019.

According to the prospectus, Dida Chuxing generates revenue through "information service fees" and does not own any vehicles.

In addition, Dida Chuxing does not have to pay massive ongoing incentives and subsidies to carpooling owners and taxi drivers, making fixed and variable costs minimal.

This asset-light business model allows Dida to rapidly expand the business scale with minimal investment, which strongly drives the growth of revenue and net profit.

In 2019, Dida's subsidies and incentives to carpooling owners and taxi drivers will account for only 4.6% of total revenue, and in the first half of 2020, this percentage will drop to 0.03%.

Under its asset-light model, the company turned a profit for the first time in 2019.

In the first half of 2017, 2018, 2019, and 2020, Dida Chuxing's operating revenue was RMB49 million, RMB118 million, RMB581 million, and RMB310 million respectively, with a big 66% year-on-year increase in revenue in the first half of 2020.

During the same period, the company's adjusted net profit was RMB -0.97 billion, RMB -1.068 billion, RMB 172 million, and RMB 151 million, respectively.

It made an adjusted net profit of RMB151 million in the first half of 2020, while it remained in the red for the same period last year, losing HK$3.22 million for the six months.

Dida Chuxing was founded in 2014 and completed a Series A round of funding that year, and a Series B round in January 2015, raising a total of $20 million.

In May 2015, we welcomed the support of a number of important shareholders, raising RMB 100 million, including IDG Capital, Nio founder William Li Bin's Bitauto, China Renaissance Capital, Shanghai Trust Bridge Partners.

In March 2017 it completed its Series D round of financing, with an exclusive investment of RMB 200 million by Nio Capital.

In May 2018, Dida Chuxing received Series E financings, with Nio investing RMB 317 million and Hangzhou Mingshan Investment Partnership investing RMB 032 million.

Nio in August tied up with Dida Chuxing to encourage more Nio owners to join the latter's carpooling platform to share their empty seats with commuters.

Dida Chuxing will provide a green vetting channel for Nio owners so that they can pass the vetting process as quickly as possible.

The two companies will also encourage Nio owners and Dida Chuxing users to share interesting stories from their journeys to the Nio App and Dida App through creative activities, the companies said at that time.

According to the prospectus, Duan Jianbo, Li Yuejun, and five others are the co-founders of the company, and Song Zhongjie is the chairman and CEO of the company.

Dida's management team holds 34.43% of the shares, or 50% of the total voting rights, and can control about 73.57% of the voting rights after the IPO, with the senior management team, headed by Song Zhongjie, maintaining the management team's independent decision-making power.

Its institutional shareholders include Nio Capital, IDG, China Renaissance Capital, Bitauto, HillHouse Capital, JD.com, and Ctrip, who held 17.34%, 9.07%, 9.07%, and 17.34% respectively in Dida Chuxing before its IPO. 7.15%, 4.95%, 4.14%, 2.86%.

(Source: Dida Chuxing)