Uber's China Rival Said to Raise $3 Billion in Latest Financing

Updated on
  • Didi Kuaidi Said to Be Valued by Investors at $16.5 Billion
  • Company Had Expanded Fundraising After Reaching Target

Didi Kuaidi, the Chinese car-booking business competing with Uber Technologies Inc., is close to raising about $3 billion from investors, more than it had originally planned, according to people familiar with the matter.

The latest round of financing values the company at $16.5 billion, according to one of the people, who asked not to be named because the details are private. That compares with the $15 billion valuation that people familiar have said the company fetched in July. Didi Kuaidi declined to comment on the status of the financing Monday.

President Jean Liu said in July the company was open to inviting more strategic investors it sees as valuable, after locking in $2 billion in funds. A “few hundred million dollars” more will be sought from new investors before the final closing in the coming month, the company had said.
Uber was said last month to be close to completing a round of about $1.4 billion in fundraising for its business in China.

Both companies have been locked in a race for market share and are dishing out incentives to attract drivers and riders. Demand for car-booking has risen as consumers frustrated with hailing taxis on the street turn to smartphone apps to reserve rides.

The new funding by Didi Kuaidi and Uber will help them pay for expansion in the estimated $1 trillion-a-year market for transportation services in the world’s most populous country. Didi Kuaidi will have cash reserves of more than $4 billion after this round of fundraising, one of the people said.

Uber told investors that it plans to spend $1 billion in China this year, while Didi Kuaidi announced it would give away 1 billion yuan ($161 million) worth of rides to commuters to compete against other players.

Didi Kuaidi’s investors include SoftBank Corp. and Ping An Insurance (Group) Co. The company has also attracted investors including Beijing Automotive Group Co. and China Investment Corp., people familiar with the matter have said. Alibaba Group Holding Ltd. and Tencent Holdings Ltd. have also invested in this round of fundraising, which kicked off in June.

Alibaba declined to comment on Didi Kuaidi’s valuation and fundraising in an e-mail.