Just days after Didi's IPO, Chinese authorities ordered app stores to remove Didi's app and began investigations into data security - effectively shutting down the business's growth prospects in the near term. For the strategy to work, investors aimed for a 'winner takes all' approach that they'd used with other Chinese start-ups such as coffee chain Luckin Coffee and ride-hailing company Didi.ĭidi essentially paid Chinese consumers to take cheap rides through its app, beating out Uber to dominate about 90% of the mainland market, and went on to raise more than $4 billion in a New York IPO on June 30.īut it soon became clear that investment strategy might no longer work.
The strategy was one of burning cash to fund exponential user growth, with hopes of profit in the future.
