Uber Rival Didi Kuaidi Reached New Heights With Support From Investors

Investors have recently taken the valuation of the Beijing-based taxi company to $25 billion

Investors in Uber’s Chinese rival improved the company’s valuation to over a sum of $25 billion. The Beijing-based cab company is about to complete its recent fundraising round to receive over $1.5 billion, which has increased its valuation to more than $25 billion, revealed people aware of the situation. The largest existing supporters of Didi Kuaidi Group, Alibaba and Tencent Group are taking part in the recent round.

The Chinese app-based cab service provider received strong demand from existing and new investors. It hopes to complete the round by the end of this month. In February, according to Wall Street Journal, Didi Kuaidi was aiming to receive a sum of around $1 billion from investors on conditions that would take the valuation of the Chinese taxi company to over $20 billion.

While many foreign startups, including those based in Silicon Valley, have been unable to raise money conveniently amidst the economic slowdown of the country, Didi Kuaidi has continued to be an exception. In February 2015, its value has increased from only $6 billion when it was established by combing two competing cab-hailing organizations.

Investors are betting that the organization will finally be able to generate a profit after luring a larger number of Chinese passengers to its facility. The recent round has come as rise in private financing for the technology industry of China while it suffers from a slowdown, as investors are more cautious due to the volatility in the stock market of the state and sluggish economic growth.

In the first half of the year, such financing contributed to approximately $4.5 billion, lower than the $6.7 billion generated in the earlier six months, according to data from AVCJ Research, situated in Hong Kong. While more new capital is injected into top players of every category, such as Didi Kuaidi, new emerging organizations, which are not leading their niches, are not able to easily raise money, venture capitalists told.

The largest internet companies of China have taken sides in the war to capture the cab market of the nation. While the investors of Didi Kuadi include Alibaba and Tencent, investors in the Chinese affiliate of Uber technologies, UberChina, include the country’s largest search engine, Baidu.

In the rapidly growing market of the country, UberChina and Didi Kuadi are fighting an intense war to entice investors and riders. Both organizations are offering huge subsidies to passengers and drivers to log up for the facilities offered by them.