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Didi cashes up for expansion

by December 22, 2017 General

Ride-hailing provider Didi Chuxing Technology Co on Thursday said it has raised $4 billion in funds earmarked for expansion overseas and into areas such as artificial intelligence (AI), as it looks to challenge Uber Technologies Inc.

The fundraising values Didi at more than $50 billion and it involved Abu Dhabi state fund Mubadala Capital, said two people familiar with the deal. Mubadala did not respond to a request for comment.

Existing investor SoftBank Group Corp also participated in the latest funding, a spokesman for the Japanese company confirmed, declining to specify the size of its investment.

“With a substantial cash reserve, Didi plans to scale up investments in AI talent and technologies,” Didi said in a statement. The funds would also help Didi “bring more innovative and diversified transportation services to broader communities around the world.”

Didi has expanded overseas rapidly in the past year since sealing its dominance in China with the purchase of Uber’s local business in 2016, ending a cash-burning subsidy war that cost the US company about $2 billion.

On Wednesday, Didi announced it was looking at entering the Taiwan market and had authorized a franchisee operator to do research there on its behalf.

Didi said in an earlier report that it was planning to enter Mexico next year, in what would be its first overseas operation not managed through a local partner.

Didi, whose brand is prominent in China but little-known in the West, will launch a smartphone app in Mexico and recruit local drivers.

It is unclear which cities Didi will target, although one of the sources said the company was aiming to launch in the first quarter of 2018.

The company has made no secret of its desire to expand beyond China, particularly in light of the growing number of Chinese customers who travel overseas.

In April, Didi raised $5.5 billion from investors, in part to fund global expansion.

Didi has also invested in several of Uber’s rivals globally, including US-based Lyft, Brazil’s 99, India’s Ola, Singapore’s Grab, Estonia’s Taxify and Careem in the Middle East.

Besides SoftBank, investors in Didi’s previous funding rounds included Apple Inc and Alibaba Group Holding.

The Wall Street Journal earlier reported the fundraising had pushed Didi’s cash reserves to $12 billion from $3.5 billion two years earlier.