Sequoia-backed Chinese delivery platform Dada Nexus files for IPO in the US

Dada Nexus, a local on-demand delivery platform in China, has filed for an initial public offering on the Nasdaq stock exchange under the symbol DADA.

According to its prospectus, the company expects to secure US$100 million from the IPO, but it’s widely estimated that the listing could raise up to US$500 million.

Photo credit: Dada Nexus

The company plans to use the proceeds to expand its business operations, including investing in technology and research and development, implementing its marketing initiatives, and growing its user base. It also plans to fund working capital needs and potential strategic investments and acquisitions, according to the filing.

Founded in 2014, Dada Nexus operates the delivery platform Dada Now. Dada Now’s intra-city delivery service currently covers more than 700 cities and counties in China, while its last-mile delivery service covers more than 2,400 cities and counties, said the company.

In 2016, it acquired JD.com’s on-demand retail service JD-Daojia. Within a 12-month period, which ended on March 31 this year, it reached a gross merchandise volume of 15.7 billion yuan (US$2.2 billion), generated from 134.7 million orders by 27.6 million active consumers.

The company, however, has yet to achieve profitability. It reported consecutive losses of 1.4 billion yuan (US$197.4 million), 1.9 billion yuan (US$267.8 million), and 1.7 billion yuan (US$235.8 million) in the past three years. It posted a US$39.4 million net loss for a three-month period ending on March 31 this year.

In 2018, the company raised US$500 million from JD.com and Walmart in a funding round. Additional backers are DST Global and Sequoia Capital, among others.

Dada’s rivals in China include the Hong Kong-listed Meituan Dianping and Alibaba’s Ele.me and Hema Xiansheng.

Currency converted from Chinese yuan to US dollar: US$1 = 7.09 yuan.