JD.Com-Owned Chinese Delivery Platform Dada Nexus Seeks Nasdaq IPO
(Yicai Global) May 13 — Chinese on-demand retail and delivery platform Dada Nexus, which is controlled by e-commerce colossus JD.Com and invested in by US retailer Walmart, is seeking an initial public offering on the Nasdaq Global Select Market under the stock symbol ‘DADA,’ according to a filing the firm submitted to the US Securities and Exchange Commission yesterday.
Dada Nexus will invest in technology and research and development, implement marketing initiatives and grow its user base with the USD100 million proceeds it expects to raise, per the filing.
Formed in 2014, Dada Nexus acquired JD’s former JD-Daojia on-demand retail business, receiving USD200 million in cash, and securing USD180 million in further investment from the e-tail heavyweight. Dada Nexus, which operates JD-Daojia and Dada Now, has cooperated with Walmart since June 2016, and the Arkansas-based retail behemoth has invested USD370 million in it in the ensuing years.
Beijing-based JD holds about 51.4 percent while Walmart has a 10.8 percent stake in the company.
Shanghai-headquartered Dada Nexus struck agreements with the two companies for support with their user traffic, supply chain, marketing and expansion plans, US IPO consultancy Renaissance Capital reported in its online newsletter, which also predicted the firm will net five times its target in the listing.
Dada has not profited since its inception and may not achieve or maintain profitability or positive cash flow in future, it said in the filing. It lost CNY1.7 billion (UD236 million) last year after running CNY1.5 billion in the red in 2017 and CNY1.9 billion in 2018. Its net revenue was a respective CNY 1.2 billion, CNY1.9 billion and CNY3.1 billion from 2017 to 2019. It also came up short more than CNY279 million (USD39.4 million) with a revenue of over CNY1 billion (USD155 million) in the first quarter.
Dada had over 634,000 active riders who collectively delivered 822 million orders in the twelve months ending March 31. Its intra-city delivery service spanned more than 700 Chinese cities and counties, and its last-mile delivery service crisscrossed more than 2,400.
The company’s Dada Now unit was the largest open on-demand delivery platform in China by number of orders last year, according to a report by China-based internet analytics firm iResearch Consulting Group.
The growth of e-commerce coupled with changing consumer shopping and the continued development of logistics infrastructure are expected to propel the local delivery market in China, which covers on-demand delivery and courier services.
Average daily orders for the domestic delivery market will reach a projected 161.5 million orders by 2023, representing a compound annual growth rate of 18.1 percent from last year, per the report.
JD.Com is China’s largest retailer, a member of the NASDAQ-100 and a Fortune Global 500 company, information on its website shows.
CAGR is the rate of return needed for an investment to grow from its starting to its ending balance if profits are reinvested at the end of every year of the investment’s term, public information shows.
Editor: Ben Armour