JD.com-backed delivery platform Dada Nexus lines up for a US stock sale even as bitter aftertaste of Luckin Coffee’s scandal lingers
- The on-demand-delivery company could raise about US$500 million in the listing, Bloomberg News reported
- Dada Nexus, which merged with JD’s JD Daojia unit in 2016, has failed to generate an annual profit since its founding in 2014
The listing could raise about US$500 million, making it one of the biggest IPOs by a Chinese company this year, Bloomberg News reported, citing people familiar with the matter.
The IPO is scheduled for later this year on Nasdaq, with proceeds from the listing going toward investments in technology, research and development and to increase the user base of the unprofitable company, according to a term sheet seen by the South China Morning Post. Goldman Sachs, BofA Securities and Jefferies are serving as underwriters on the offering, according to a filing with the Securities and Exchange Commission.
Four years ago, JD merged its JD Daojia unit with Dada Nexus and provided US$200 million in cash to Dada Nexus, receiving about 47 per cent of the combined company’s equity. JD exercised a warrant to acquire additional shares in the company in 2017 and invested a further US$180 million in its preferred shares in 2018.
Dada Nexus, which is based in Shanghai, operates JD-Daojia, an on-demand retail platform, and Dada Now, a crowdsourced delivery platform, in China. The company’s first-quarter revenue more than doubled to 1.1 billion yuan (US$155 million), from 526.5 million yuan in the same period in 2019, according to the SEC filing. The company has not earned an annual profit since its founding in 2014, and reported a net loss of 2.46 billion yuan in 2019.