What was meant to be a moment of pride for one of China’s Internet giants turned, in a matter of days, into an epic car-crash. On June 30, the ride-hailing app Didi, which dominates the China market, raised $4.4 billion in its much anticipated listing on the New York Stock Exchange, the biggest Chinese listing since Alibaba raised a record $25 billion in 2014. Didi’s IPO valued the company at $73 billion.
Within a week, Didi would have not only lost more than one-fifth of its market value, but found itself facing the threat of lawsuits from angry U.S. investors as Chinese authorities, days after the IPO, said they were investigating the company over its use of data, citing privacy and national security concerns. On July 9, Chinese regulators then took an extraordinary step of banning the country’s biggest ride-hailing app from registering new users, as well as removing 25 of its apps from app stores. An uncertain fate now awaits Didi, which has pledged to cooperate with the authorities.
The rise and sudden fall of Didi is the latest episode of a tug-of-war between the Communist Party and big tech companies, which burst into global attention in November when the IPO of Alipay, the financial payments arm of Alibaba, was suspended in Shanghai at the last minute. A number of investigations into tech companies then followed, with regulators taking aim at both monopolistic practices and the wealth of data that companies have accumulated.
Didi’s story began in 2012, when founder Cheng Wei launched an app in Beijing for hailing taxis, called Didi Dache. In 2015, the company merged with another hailing app, Kuaidi Dache. Thus was born Didi Kuaidi, later renamed Didi Chuxing (or Didi, for short).
Didi expanded beyond taxis to a range of servi ..
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