Didi Kuaidi raising further $1bn to push Uber out of China
Thu 25 Feb 2016
Chinese taxi-app Didi Kuaidi, Uber’s regional enemy number one, has announced that it is securing $1bn in funding. The round, which is not yet complete, is expected to revalue the company at over $20bn.
In 2015, Didi Kuaidi raised $3bn in its efforts to push Uber out of its territory. Last year’s funding started at $2bn, and raised the final amount thanks to last minute interest. It is believed that this could also be the case with the most recent round.
The company has said that the investment will be funnelled into improving its technology, to help improve wait times, synchronise its services and platform-based developments.
Formed just a year ago, Didi Kuaidi was a merger between two of China’s leading on-demand services – Didi Dache and Kuaidi Dache, backed by Tencent and Alibaba respectively. Its domestic expertise has allowed the company to keep its head above Uber for total coverage of China, as well as in other areas. The ride-hailing service offers a fleet of registered taxis, peer-to-peer rides, shuttle buses and chauffeur services across more than 360 locations in China, compared to Uber’s 22.
Uber has planned aggressive expansion strategies in China to make up the ground. It has recently announced its aim to increase its services to 100 towns and cities by the end of the year. The company has also been actively pursuing funding, closing an unknown amount and reaching a $7bn valuation in January.
Last week, Uber CEO Travis Kalanick said that the U.S. firm was losing $1bn per year in China, blaming fierce regional competition. He referred to one particular unnamed rival, widely assumed to be Didi Kuaidi, who was “buying up market share.”
Kalanick defended the importance of playing the long game in China, commenting that he “prefers building rather than fundraising” – a tactic which could see the company squeezed out by competitors whose growth plans rotate around purchasing market share.