Uber’s biggest rival in China, Didi Chuxing raised $4 billion in fresh funding, pushing its valuation closer to the international ride hailing giant. It is said that the new funding will allow for more money to be spent on self-driving vehicles and other artificial intelligence systems.
Beijing based Didi gets an extra $12 billion cash reserves and a valuation of $56 billion, pushing it to be one of Asia’s largest startups. According to a report by Wall Street Journal (WSJ), investors in Didi’s new funding include Japanese mega-fund-manager SoftBank Group Corp. and Mubadala Development Co., an Abu Dhabi state fund.
In comparison, WSJ reported Uber’s valuation at roughly $68 billion based on its last funding round in June 2016. However, a current SoftBank offer to purchase a sizeable stake at a large discount would lower the U.S. ride-sharing firm’s valuation in the range of about $50 billion.
WSJ also reports that the additional funding Didi raised will be used “to develop autonomous vehicles, such as self-driving buses, and developing public transportation management programs to dispatch buses, subway trains and taxis based on traffic patterns”. This efforts are backed by the huge amount of data the company collects from its more than 450 million active users.
“The penetration of the average user is so much greater in China than in the U.S. so you actually could argue Didi is much better positioned from a perspective of training autonomous vehicles,” said Chris DeAngelis, general manager of consultancy at Alliance Development Group, speaking to WSJ.
In 2016, Didi bought over Uber’s operations in China. The Chinese ride hailing company also partnered and invested in other ride-sharing platforms including Grab, as well as operations in other Southeast Asian countries. While primarily focusing on the domestic market, Didi has been setting its sights overseas, increasing its global presence.
In March 2017, Didi opened an R&D lab in Silicon Valley, focusing on intelligent driving technologies and AI-based security. Didi is also planning expand to Taiwan through a local partner, LEDI Technology Co.
The funding will also be invested into building an electric car charging network. Didi currently has more than 260,000 electric cars and plans to increase that to 1 million by 2020.
Source: Wall Street Journal
