Mirae, Naver set for hefty profit from Didi Chuxing IPO

The prospective initial public offering of DiDi Chuxing Technology Co., China's largest ride-hailing app, is expected to generate as much as 200 billion won ($180 million) in aggregate profits for South Korea's Mirae Asset Financial Group and the country's online titan Naver Corp.

Didi Chuxing recently applied for an IPO on the Nasdaq, which is likely to take place later next month at the earliest, according to media reports. The Chinese mobility platform is estimated at $70 billion-$100 billion in enterprise value, poised to be this year's largest IPO in the US.

Back in 2018, both Mirae Asset and Naver had invested a combined 280 billion won in Didi Chuxing through their Asia-focused startup fund launched to invest as much as 1 trillion won in Asian venture companies. At the time, they valued the Chinese startup at $56 billion in what was the largest investment in a foreign unicorn company by a South Korean investor.

In the same year, the venture fund also invested $150 million in Grab, Southeast Asia's leading ride-hailing and food delivery platform. The Singapore-based company is preparing for a US listing through a merger with a special purpose acquisition company.

Both Mirae and Naver look set to reap more than twice their investment in Grab, in addition to estimated gains from Didi Chuxing's IPO of between 70 billion and 200 billion won.

The co-investment by Mirae and Naver in Didi Chuxing was divided into: 243 billion won by Mirae Asset Securities Co., formerly known as Mirae Asset Daewoo; 18.4 billion won by Naver; 10 billion won by Mirae Asset Capital Co.; and the remainder from unidentified investors. 

Didi Chuxing was formed in 2015 by a combination of Tencent-invested Didi Dache and Alibaba Group-invested Kuaidi Dache. It has grown to be China's largest mobility platform following its acquisition of Uber's Chinese operations in 2016.

Its other shareholders include SoftBank Vision Fund, Uber Technologies Inc. and Tencent Holdings Co.

Currently, the company, China's equivalent of Uber, controls over 90% of the ride-hailing services market at home. In the first quarter of this year, it earned 5.5 billion yuan ($860 million) in net profit on revenue of 42.2 billion yuan. 

Mirae and Naver have built a strategic partnership through cross-shareholdings since 2017. Their Asian startup fund has now invested in Indian fintech startup KreditBee, India's largest online grocery store Bigbasket and Indonesia's e-commerce startup Bukalapak.

Write to Jin-seong Kim at jskim1028@hankyung.com
Yeonhee Kim edited this article.