Uber is on a mission to prove to China’s consumers and authorities that it’s just as Chinese as dumplings and baijiu. Now it’s hinting at a domestic IPO for its local branch, UberChina.
After months of rumors in Chinese media, Liu Zhen, who oversees Uber’s strategy in China, confirmed with reporters (link in Chinese) at the Beijing News that the company was indeed considering listing its domestic operations inside the country’s borders.
When Quartz reached out to UberChina for more information, a spokesperson gave the following statement:
Of course there is the possibility that UberChina, which is a separate entity, could at some point list on the Chinese stock market. But as Travis [Kalanick, CEO of Uber] has always made clear, there are many advantages for investors to Uber being a private company, in particular having the freedom to take long-term bets.
Uber has typically distanced itself from speculation about an IPO in the United States, though analysts have interpreted a recent $1 billion credit line and a CFO turnover as indicators it’s headed for a listing.
An IPO in China would not be illogical for UberChina. Many Chinese companies that listed in the US within the past decade have said they intend to go private, with the intention to re-list in China, seeking higher valuations in Shenzhen or Shanghai. (Some companies were having second thoughts about this, it should be noted, after China’s recent stock market turmoil.)
It’s also possible UberChina seeks something besides cash by listing in China: namely, positive PR. The company faces stiff competition from local player Didi Kuaidi, which is in over 300 Chinese cities and recently raised money from China’s national sovereign wealth fund.
Given China’s growing aversion to foreign tech companies inside its borders, as well as the legal grey area that UberChina operates in, the company is incentivized to do everything it can to show authorities it’s Chinese. That not only includes strategic choices like staffing locally and raising Chinese venture capital, but also, perhaps, listing in China.