Uber's Rival Raising Billions in China

Billions of dollars are being raised by Didi Kuaidi to give tough time to Uber and lead the Chinese cab industry

 Uber’s rival is about to raise around $2 billion in its recent fundraising round, as the biggest ride sharing company of China wars with the American application based cab service provider to dominate the Chinese market for ride sharing, aware people of the matter. The biggest rival of Uber aims to close the funding round in the upcoming few weeks with around $25 billion valuation, stated the people, who asked to be kept anonymous because the issue is private.

That would turn it into the fourth highly valued startup across the world after Travis’ company, Xiaomi Corporation and the online rent lodging service provider Airbnb, revealed a research organization CB Insights. Uber and Didi are battling for supremacy in China as the ride-sharing market grows. Didi, which is backed by leading internet companies Tencent Holdings Limited and Alibaba, jumped out to dominate the market. But the transporter is heavily spending to catch up and has stated China could finally turn into its biggest market.

Both need money to pay for subsidizing consumer fares and hiring drivers. Spokesperson of the Beijing based company refused to share views regarding the financing through an e-mailed statement. Tencent shares grew to 1.1% in Hong Kong. Didi had been trying to receive $1 billion in Feb 2016 and grew the target to a sum of $1.5 billion in April 2016, people aware of the issue had stated. The recent increase in financing was partly due to a higher level of demand, the people stated.

If the Chinese organization completes the financing, it will indicate resilience in the Chinese start-up industry, even as their American competitors battle. The finance affiliate of Alibaba, Ant financial, received a sum of $4.5 billion in April 2016, a record made by a private tech organization. In January, the previous record was set when Meituan Dianping, which is the Chinese group-buying service received $3.3 billion.

Both Didi and Uber have received money rapidly to fight an expensive battle. On-demand vehicle service providers have succeeded across the world as the expansion of mobile usage takes place and passengers seek quicker or simpler alternates to public transportation as well as cabs. Yet the US transporter and its competitors can lose funds on rides as they depend on subsidies to lure customers, particularly as they make entrance into new markets.

Didi received $3 billion in 2015, which took its valuation to $16.5 billion, a person aware of the matter stated at the time. It established a global alliance with Lyft in the United States, Southeast Asian taxi service provider Grab and Indian cab company Ola to battle an internationally growing Uber.