Dada is backed by Chinese e-commerce firm JD.com and Walmart Inc, the world’s largest retailer
Chinese delivery firm Dada Nexus Ltd will launch the investor roadshow for its U.S. initial public offering as early as Wednesday, according to people familiar with the matter, braving U.S.-China tensions over Chinese companies pursuing their stock market debut in New York.
The U.S. Senate passed legislation last week that could prevent some Chinese companies from listing on U.S. exchanges unless they follow standards for U.S. audits and regulations. Nasdaq Inc also tightened listing restrictions for companies from China and other countries.
Shanghai-based Dada is backed by Chinese e-commerce firm JD.com and Walmart Inc, the world’s largest retailer.
Dada aims to sell around $500 million (405.5 million pounds) in stock, with JD.com and Bentonville, Arkansas-based Walmart expected to be cornerstone investors, the sources said.
Dada and Walmart declined to comment. JD.com did not immediately respond to a request for comment.
Investor scrutiny of Chinese IPOs in the United States has increased in the wake of Chinese coffee chain Luckin Coffee’s announcement in April that some employees had fabricated sales accounts. Chinese firms may also be left with fewer listing options after China said it would seek to tighten its grip on Hong Kong, a popular IPO venue for Chinese companies.
In Dada’s favour is an uptick in demand for delivery services during the lockdowns enforced in many cities to curb the COVID-19 outbreak. Dada operates local on-demand delivery platforms JD-Daojia and Dada Now.
Shares of Chinese cloud computing company Kingsoft Cloud Holdings Ltd, expected to benefit from current economic conditions, have risen above their IPO price since going public in New York last month.
Dada’s net loss last year widened to 2.46 billion yuan ($344.97 million) from 2.39 billion yuan in 2018. Net revenue in the first quarter rose to 1.1 billion yuan from 526.5 million yuan a year earlier.
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