JD's Dada to Lift off Friday on the Nasdaq in $281 Million Offering

Backed by retailer giants Walmart and JD, Dada is lucky to get a public listing while smaller Chinese firms just wait.

Anna Vodopyanova
    Jun 01, 2020 7:00 AM  PT
JD's Dada to Lift off Friday on the Nasdaq in $281 Million Offering
author: Anna Vodopyanova   

JD's Dada Nexus Ltd. is set to lift off in its initial public trading on the Nasdaq this Friday, raising up to $280.5 million in investor capital.

In its prospectus dated June 1, Dada said it hopes to sell 16.5 million American depositary shares in the price range of $15 to $17 per share on the Nasdaq Global Select Market.

Underwriters are Goldman Sachs (Asia) LLC, BofA Securities Inc., and Jefferies LLC. They may acquire an additional 2.5 million ADSs upon the IPO.

Two of Dada's largest shareholders, JD Group (Nasdaq: JD) and Walmart (Nasdaq: WMT), have expressed interest in purchasing up to $60 million and $30 million in the float, respectively.

Dada's mission is "to bring people everything on demand." It operates JD-Daojia and Dada Now, two local on-demand retail platforms that are among China's largest, according to commissioned research by iResearch Consulting Group.

Dada partners with supermarket chains including Walmart (NYSE: WMT), Yonghui Superstores (SHA: 601933), and state-owned China Resources Vanguard to deliver intra-city orders in 700 cities in China and last-mile service in more than 2,400 cities and counties, according to the filing.

For 2019, Dada reported 61.3% year-over-year revenue growth to $437.8 million on a net loss of $235.8 million. In the first trimester of 2020, revenue doubled to $155.3 million from a year ago, while losses narrowed to $39.4 million, according to the prospectus.

It said it aims to use the proceeds of the IPO to invest in technology, grow its user base, and other purposes.

The company has applied to list under the trading symbol "DADA."

Reportedly, Dada was targeting to raise up to $500 million in its U.S. IPO. Wall Street, however, has turned hostile toward Chinese listings after a number of fraud allegations have surfaced. The recent scandal at beverage giant Luckin Coffee (Nasdaq: LK), which is now fighting delisting, has brought increased scrutiny of foreign listings on the agenda, and the companies' IPO valuations lower.

JD-backed Dada, in fact, was lucky – smaller Chinese firms have been pursuing a New York listing for months without avail.