Ride-hailing giant Didi Chuxing raises US$5.5 billion
- Author: Douglas Reid Apr 30, 2017,
Apr 30, 2017, 1:36
That would surpass the level reached by smartphone maker Xiaomi and make Didi the most valuable start-up in the world after Uber.
The new funds will be used to promote the company's global expansion strategy and investment in the field of cutting-edge technologies.
Investors include Japan's Softbank Group Corp, private equity firm Silver Lake, China Merchants Bank and Bank of Communications, the people said.
Uber and Didi Chuxing used to be fierce competitors once in the country, but Didi purchased the operations of Uber in the Chinese market a year ago, once it became clear that both the businesses were losing money because of the competition, which led them to finance losses as they were offering deep discounts to capture market share. In places like Beijing and Shanghai, the company's drivers are required to be local residents, preventing what is estimated to be thousands of potential Didi Chuxing drivers from nearby towns and countryside to work for the startup.
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China legalised ride-hailing services in July previous year and is the world's largest market, fuelled by hundreds of millions of mobile-savvy Chinese millennials.
SoftBank founder Masayoshi Son encouraged Didi chief executive officer Cheng Wei to take more capital so he won't be constrained in pursuing new opportunities, one of the people said.
"Investors' support reflects strong confidence in the vision and stewardship of Didi's management".
The company hopes that driverless technology could help it overcome these hurdles in the future. At this valuation, Didi has become the most valuable startup after Uber. Last year, Apple also announced a $1 billion investment in Didi Chuxing for co-developing a big-data algorithm to drive service and efficiency.