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Didi Chuxing

Chinese car-hailing app Didi Kuaidi raises US$2 billion in funding, beating Facebook's record

PUBLISHED : Wednesday, 08 July, 2015, 1:44pm
UPDATED : Friday, 04 September, 2015, 1:07pm

China's largest taxi and car-hailing app Didi Kuaidi said on Wednesday it has attracted US$2 billion through fundraising, possibly the most lucrative single round of fundraising ever made by a private company.

It targeted US$1.5 billion, the previous record set by Facebook, but reached the new milestone within just two weeks of launching the campaign, the company said.

China Renaissance acted as joint financial advisor on Didi Kuaidi’s latest round of private financing. The US$2 billion landmark transaction is the largest private placement done by a non-public company in the internet sector globally to date.

Participating investors include existing shareholders Alibaba, Tencent, Temasek, Coatue Management as well as big new investors such as Ping An Ventures and Capital International Private Equity Fund, among others.

This will push Didi Kuaidi’s cash reserves past US$3.5 billion, beyond that of any other mobile internet company in China, it said.

“The latest fundraising will help Didi Kuaidi strengthen its leading position in the integrated transportation network within China’s mobile-based transport market,” said Jean Liu, the company’s president.

“This will help us to further expand our initiatives in R&D, big data and marketing, while also enhancing the user experience and helping to improve drivers’ incomes,” she added.

The company will continue to focus on the Chinese market and will use its latest source of income to grow and roll out more services, Liu told the South China Morning Post by phone.

The company, in its current incarnation, is the result of a merger in February between two former rivals: Tencent-backed Didi Dache and Alibaba-backed Kuaidi Dache. They previously only offered taxi-hailing services.

But in the last few months, Didi Kuaidi has delivered three million rides a day, it said. Its private car services now cover 80 cities in China.

Last month, it launched a new carpooling service called Shun Feng Che in Putonghua, or “Hitch” in English, which now covers over 148 cities in China and see more than 600,000 daily requests. 

It is about to launch a new designated driver service for people who are either unable or unwilling to drive, for example if they are over the legal drinking limit, the company said.

“[we] will continue to grow rapidly and introduce new services,” Didi Kuaidi CEO Cheng Wei said in a statement.

“We aim to create a mobile transport ecosystem that will displace private car ownership and become a part of daily life for Chinese citizens.” 

The latest fundraising should help Didi Kuaidi approach its goal of becoming the largest one-stop transportation network in China within three years. 

It aims to serve over 30 million passengers and 10 million drivers daily, while ensuring that customers can get a ride within three minutes anywhere in the country.

Even though its business model has been supported by investors, the company’s rapid development has been met with resistance in many second-and third-tier Chinese cities. Infuriated taxi drivers across the country have accused its private car service of poaching their business.

Last month, taxi operators in Luoyang city, in central China’s Henan province, asked all their drivers to uninstall Didi Kuaidi’s apps.

Before that, the Sichuan provincial capital of Chengdu banned the company’s private-car service, as did another major city, Zhengzhou, the capital of Henan province.

In May, Didi Kuaidi said it would spend one billion yuan (US$161 million) to give free or discounted rides to passengers to promote its Didi Express service.

Liu said the company is working closely with local governments in China to improve their public transportation services.