Uber’s Chinese rival – Didi Chuxing Technology Co. has raised $7 billion in its latest fundraising effort. Closed at a $4.5 billion fundraising round, Didi successfully attracted $1 billion investment from Apple (NASDAQ: AAPL) and $600 million from China’s leading Life Insurance Company. Didi also snagged a $2.5 billion debt package from China Merchants Bank Co. on top of the fundraising. The ride-sharing company will now have more than $10 billion in cash on hand following the new fundraising round through equity and debt.
Didi Chuxing Technology Co. is the biggest ride-sharing company in China, and its newly earned valuation is more than $25 billion which will make it the world’s third-largest privately backed young company, surpassing Airbnb.
Didi was formed last year by the merge of two rival Chinese taxi-hailing apps, which is also backed by powerful domestic and foreign investors, such as Alibaba Group Holding Ltd. (NYSE: BABA) and Tencent Holding Ltd., as well as Apple. Tencent and Alibaba both put additional money into the latest fundraising round, without disclosing the exact amount. Other big investors in the round included several Chinese banks and insurance companies that made investments of more than $100 million each.
In addition, Didi has formed a global coalition with Lyft Inc. in the U.S., India’s Ola and Southeast Asia’s Grab, which is trying to fend off an aggressive charge by Uber onto its home turf. Both companies are amassing cash and spending aggressively to expand in the world’s second-largest economy, partly by subsidizing the costs of rides.
Didi is currently planning its initial public offering in New York next year, but the time will depend on the tussle played out with Uber. Uber also made big efforts on attracting Chinese drivers and passengers to their competing services in China, while battle between Uber and Didi for global investment allies has only intensified in recent months.
Uber raised $3.5 billion from the investment arm of Saudi Arabia earlier this month as part of a $5 billion financing round, the largest to date raised by a private, venture-backed company. Uber also raised $2 billion from so-called leveraged-loan market in the first time. Besides, Uber has hired Morgan Stanley and Barclays PLC to sell a so-called leveraged loan of $1 billion to $2 billion to institutional investors in the coming weeks, according to The Wall Street Journal report. While Uber still facing some obstacles in China, especially in terms to the country’s taxi-hailing segment.