First Free Story (1 of 3)Join Skift Pro
Taxi applications backed by Alibaba Group Holding Ltd. and Tencent Holdings Ltd. are seeking to raise funds that value the company at $12 billion to $15 billion, people familiar with the matter said.
Xiaoju Kuaizhi Inc. is raising at least $1.5 billion to fend off Uber Technologies Inc. in China, the people said, asking not to be identified because they aren’t authorized to speak about the matter. The funding is coming from new and old investors, with the valuation doubling since the competing Didi and Kuaidi apps combined in February, the people said.
The two apps form China’s largest taxi and ride-sharing platforms after merging to limit the rising costs of competing with each other and Uber. San Francisco-based Uber has told investors it plans to invest $1 billion in China, the Financial Times reported.
Didi earlier announced it would give away 1 billion yuan ($161 million) worth of rides to commuters to compete against Uber and Yidao Yongche, which also operates in the estimated $1 trillion-a-year market for transportation services in the world’s most populous country.
Didi Kuaidi still runs separate apps that customers use to access their service, while combining their technology and data.
The new valuation would make Didi Kuaidi one of the most valuable startups in China after smartphone maker Xiaomi Corp., valued at $45 billion.
Uber plans to raise $1.5 billion at a valuation of $50 billion, a person with knowledge of the matter said in May.
Under Attack From Regulators
China’s car-hailing industry is currently dominated by Didi Kuaidi, which accounts for 78 percent of ride bookings, according to Analysys International, an industry researcher. Alibaba and Tencent own 10 percent and 13 percent, respectively, in the merged company and Tokyo-based SoftBank Corp. also has a stake. Uber accounts for about 11 percent of bookings, according to Analysys.
Uber’s service has come under attack from regulators and competing drivers around the world, including in China. The startup ordered drivers to avoid protests, according to the Wall Street Journal, after several Uber drivers had been assaulted and offices in Guangzhou and Chengdu raided by authorities.
Baidu Inc., China’s largest search engine operator, in December agreed to buy a stake in Uber.
To contact Bloomberg News staff for this story: Shai Oster in Hong Kong at firstname.lastname@example.org; Lulu Yilun Chen in Hong Kong at email@example.com To contact the editors responsible for this story: Michael Tighe at firstname.lastname@example.org Dave McCombs, Robert Fenner
This article was written by Bloomberg News from Bloomberg and was legally licensed through the NewsCred publisher network.