Alibaba, Tencent Holdings to Fund Didi Kuaidi $1 Billion
By Staff Writer
Didi Kuaidi, Uber's major rival in China is raising $1 billion filling its treasure chest to get more ready for competition and venture into new businesses. It is going to be a tougher competition between the two ride-hailing services as Uber company already invested $ 1 billion last year.
According to CNNMoney, an Uber spokeswoman claimed that the company is presently operating in more than 40 cities in China and plans to expansion of up to 100 by the end of 2016. Despite the $1 billion loss and strong competition for market share, Uber has big hopes in China as competition increases.
Didi Kuaidi is overwhelmingly investing on new additional drivers and offers competitive fare prices as it targets to keep up with Uber Technologies Inc. in China. Last year, Uber has already spent $1 billion and has plans to spend another comparable sum this year. Uber lost $1.7 billion in last year's first three quarters, where most investment went to Asian expansion. CEO Travis Kalanick said that the company generates revenue in the U.S., according to a blog in Betakit, a Canadian technology, as reported by Bloomberg.
Once the provision of funds for Didi Kuaidi closes, it would value its rival Uber at more than $20 billion. There has been oversubscription of the round and Didi Kuaidi is still negotiating terms with the investors. To face Uber, Didi Kuaidi teamed up with Lyft Inc. in the U.S. and Ola in India. Investor's last valued Uber at $62.5 billion where the company raised more than $10 billion in five years since it began its operation.
The new fundraising was supported by Alibaba Group and Tencent Holdings where a additional $3 billion round was completed last September. Didi Kuaidi has the biggest market share in China with the car-hailing apps, according to Fortune.
It's a battle again between Didi Kuaidi and Uber as both ride-hailing services company invest large sum of money backed by other giant companies such as Alibaba and Tencent Holdings. Merging with other companies expand the business and raise more funds to improve services and additional workforce.