Today, Didi Kuaidi, a taxi-hailing startup has raised $2 billion in two weeks, led by investors undisclosed. This is the largest-ever fundraising for a Chinese technology startup.
Like Uber, Didi Kuaidi allows people use a smartphone app to request for rides from private cars or taxis. It has the largest marker share of on-demand transportation apps in China and this funding has raised the cash reserves to $3.5 billion. The full list of the investors were not disclosed by the company, however, those made public include Capital International Private Equity Fund and Ping An Ventures. Sources suggest that Capital International, the private-equity arm of Los Angeles-based money manager Capital Group Cos., invested around $350 million as a large investor. They have now joined the existing investors Alibaba and Tencent.
” Didi Kuaidi provides an important solution to the growing transportation demands of the Chinese, and we believe they are well-positioned for rapid growth,” said Leonard Kim, a managing partner for Capital International Private Equity Funds in Asia.
” The fact that global investors are eager to participate in this fundraising round shows their confidence in the development of our company,” said CEO of Didi Kuaidi Cheng Wei.
Officially launched two weeks ago, the funding round values the company around $15 billion, according to source reports. This fundraising is the largest for a venture-backed private company in China overtaking the $1.6 billion raised by Chinese e-commerce giant Alibaba Group Holding Ltd. in 2011 and the $1 billion raised by Xiaomi Corp in December last year.
The company plans to use its funds to build new services, finance research in data analytics and improve the customer experience. The fundraising seems to be a part of Didi Kuaidi’s seeking ways to battle against its strong competitor Uber, which is also raising funds to expand in China. Though the company has not revealed how it is planning to fend off competition from the likes of Uber. Uber is currently hiring over 250 positions throughout Asia, and has its operations in various big cities of China.
” What I want to emphasize is, we have $3.5 billion in hand,” said Jean Liu president of Didi Kuaidi. ” We can be disciplined and at the same time flexible in terms of how we enlarge the market.”
During the troubled times for Chinese companies, comes a good news for Didi Kuaidi. Despite the sharp fall in the stocks for major Chinese companies following a year of unsustainable rallies, Didi Kuaidi being still a private company avoided much of that fallout. Even the tech giant Shenzhen Composite has lost almost 25% of its value in the last few days.