China's biggest ride-hailing platform, Didi Chuxing, recently states that they will be investing $1 billion into their own auto servicing company. This is apart of a biggest re-branding push as Didi is pushing towards their initial public offering.
Currently Didi's services company, which also incorporates their car maintenance, auto leasing, and gas station services, has a gross merchandise value of $8.79 billion.
This unit of the company will be consolidated under the new business Xiaoju Automobile Solutions Co. “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.
This choice is coming before Didi begins final preparations for their massive IPO, which could occur as quickly as the beginning of next year. Didi has yet to comment directly about a possible IPO or if they have any current plans to do so.
An IPO from Didi would be one of the largest in many years since they currently have an evaluation of around $56 billion after their last fund raising round in 2017.
Recently, sources told Reuters that the company's car services unit alone is easily worth around $2-3 billion and the unit might be separated from the core business before any possible IPO. Didi also started their own auto services business back in 2015 but that could be integrated under the services banner sometime this year.
Xiaoju expects to have year long sales around $13.17 billion by the end of the year, and is already running in 257 cities with around 7,500 industry partners.
Didi Chuxing is also putting a lot of their money into growing the core of their business beyond their current markets.
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