Didi Chuxing, which gained prominence in China after it bought Uber’s operation in China, is also diversifying in the food delivery services.
According to several sources with direct knowledge of the matter at hand, China’s Didi Chuxing Technology Co Ltd, a ride hailing firm, aims to spin off its car services unit ahead of its IPO in a deal worth up to $1.5 billion.
According to sources, Didi is hoping to raise between $1 billion and $1.5 billion from the divestiture and has already tapped existing investor Japan’s SoftBank Group.
Didi Chuxing’s ride hailing business is primarily involved in car rentals, maintenance services as well as providing the drivers optimized gas station deals, said sources.
Didi Chuxing is valuing this business between $2 billion to $3 billion, said sources.
While SoftBank did not immediately respond to requests for comments, Didi Chuxing declined to comment.
Sources preferred the cover of anonymity since the information is yet to be placed in the public domain and is thus confidential.
Didi Chuxing emerged as the top operator in ride-hailing industry in the China when in 2016 it purchased Uber’s operations in the country. Since then, it has expanded into several markets across the globe including Brazil, Australia, Southeast Asia and Mexico.
Didi Chuxing has also expanded in the food delivery service to compete with home-grown startup Meituan-Dianping, which is planning its IPO of more than $4 billion in Hong King in the coming months.
Although Didi Chuxing has neither confirmed nor denied its IPO plans, it is expected to go public at some point.
The ride-hailing firm is currently valued at $56 billion.