China innovators

Didi Chuxing completes US$7.3 billion fundraising

PUBLISHED : Thursday, 16 June, 2016, 5:32pm
UPDATED : Thursday, 16 June, 2016, 7:28pm

Didi Chuxing, operator of China’s top ride-hailing mobile application, has completed a US$7.3 billion fundraising, the company announced yesterday, even as it comes under fire from several local governments for safety concerns and unregulated operations.

The deal is one of the world’s largest private equity funding rounds, an includes US$4.5 billion in funds from Apple, China Life, Ant Financial and other new shareholders, together with existing investors Tencent, Alibaba, China Merchants Bank, and SoftBank, among others, according to a company statement.

In addition to the US$4.5 billion equity investment, China Merchants Bank has also committed to become the lead arranger for a syndicated loan facility to Didi of an amount up to US$2.5 billion. China Life also added a long-term debt investment of two billion yuan (HK$2.4 billion).

The capital will be used for technology upgrading, big data research and operations, investment in improving rider and driver experiences, as well as exploration into new business lines and opportunities.

At present, Didi works with more than 14 million Chinese car owners and drivers. It had a more than 87 per cent market share in private-car-hailing services and nearly a 100 per cent share in taxi-hailing services last year, according to data from the China National Network Information Centre.

“In just four years, Didi has created a firm lead in China’s mobile transportation sector … we will stay true to our original vision: to bring riders more enjoyable mobility experience and drivers broader opportunities for personal development, and to drive the future way of life in China as a world-class tech company,” said Cheng Wei, founder of Didi.

Didi has secured a clear position of strength in mobility technology, and Tencent will continue to work with Didi in building a friendlier, and more efficient mobile internet environment, according to Tencent Holdings.

Meanwhile, municipal governments like Shenzhen, Guangzhou and Taiyuan, have accused Didi and other ride-sharing apps of unregulated or even illegal operations as well as safety violations.

Concerns over public safety have been in the spotlight since May, when a 24-year-old man who fraudulently signed up to work for Didi confessed to killing a young woman passenger and dumping her body in a remote part of Shenzhen.

On Wednesday, Shenzhen’s municipal transport committee said that Didi had missed a deadline to restructure its services to align with local regulations. The government body also noted that Didi is the only app that has declined to share with authorities the number of private cars working with the app in the city.

Taiyuan, capital of North China’s Shanxi province, has also launched a three-month crackdown on car-hailing apps’ services since late May. Local officials have operators must have approval to engage in the passenger transportation business.