JD.com’s Dada Nexus Plans USD$500 Million Stateside IPO

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Online delivery platform Dada Nexus (达达集团) made a filing with the US Securities Exchange Commission (SEC) on Tuesday for an IPO on the Nasdaq Stock Market to raise USD$100 million.

Renaissance Capital says that the filing is simply a placeholder, and the online platform actually hopes to raise up to $500 million via a stateside listing.

Dada Nexus was first founded in 2014, and its JD-Daojia (达达-京东到家) and Dada Now (达达快送) brands have since emerged as two of the leading on-demand retail platforms in the Chinese market.

JD.com and Walmart made an investment of $250 million in Dada Nexus in 2016, while the company is also cooperating with other companies in areas including marketing, user traffic, supply chain, and an “omni-channel initiative.”

JD.com is currently the biggest shareholder in Dada Nexus with a 51.4% stake, while Walmart holds 10.8% of equity. JD.com also holds a 47.4% stake in joint-venture JD Daojia, and is the company’s single largest shareholder.

Dada Nexus saw operating revenues of 1.218 billion yuan, 1.922 billion yuan and 3.1 billion yuan in 2017, 2018 and 2019 respectively.

In the first quarter of 2020 Dada Nexus posted operating revenues of 1.1 billion yuan, for a YoY rise of 108.9% compared to the 527 billion yuan in revenue seen during the same period last year.

The company’s strategic relationship with JD.com and Walmart has emerged a major driver of revenue growth, with affiliate revenues at 691 million yuan, 1.033 billion yuan and 1.967 billion yuan in 2017, 2018 and 2019 respectively.

In the first quarter of 2020 affiliate revenues were 597 billion yuan, for a YoY rise of 83.1%

Dada Nexus has nonetheless sustained net losses over the past three years, at 1.449 billion yuan in 2017, 1.878 billion yuan in 2018 and 1.67 billion yuan in 2019, for cumulative losses of 4.997 billion yuan over a three year period.

Net losses were 279 million yuan in the first quarter, as compared to 337 million yuan for the first quarter of 2019.

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