China’s Didi Raises $4 Billion

Didi Chuxing, China’s biggest ride-hailing app, increased its valuation to about $56 billion after completing a new funding round of more than $4 billion.

The Chinese ride-hailing firm on Thursday said it has raised $4 billion in funds earmarked for expansion overseas and into areas such as artificial intelligence (AI), as it looks to challenge Uber Technologies Inc.

The financing increases its cash reserves to $12 billion and includes backing from Abu Dhabi’s Mubadala, the people said, asking to not be identified as the details are private. The company was previously said to be valued at $50 billion. Didi confirmed the $4 billion round and said it will help fund international expansion while SoftBank Group Corp. said it took part.

"With a substantial cash reserve, Didi plans to scale up investments in AI talent and technologies," Didi said in a statement. The funds would also help Didi "bring more innovative and diversified transportation services to broader communities around the world."

Didi has come to dominate ride-hailing in China, driving Uber Technologies Inc. out of the market after an expensive subsidy war before turning itself into the world’s second-most valuable startup.

It has expanded overseas rapidly in the past year since sealing its dominance in China with the purchase of Uber's local business in 2016, ending a cash-burning subsidy war that cost the U.S. firm roughly $2 billion.

Earlier this month, it was reported that Didi will launch in Mexico next year. The move would mark Didi's first expansion of its services beyond China. Also, on Tuesday, Didi said it was looking to bring its ride-hailing service to Taiwan.

Didi has also invested in several of Uber's rivals globally, including U.S.-based Lyft, Brazil's 99, India's Ola, Singapore's Grab, Estonia's Taxify and Careem in the Middle East.

Didi’s expansion comes at a difficult time for Uber, whose founder Travis Kalanick was replaced by Dara Khosrowshahi earlier this year after a series of scandals. These ran the gamut from a massive leak of 57 million rider and driver records to revelations that the company ran programs to spy on competitors.

The new funding comes after Didi raised more than $5.5 billion in April, a round that was led by SoftBank. Matthew Nicholson, a spokesman for Tokyo-based SoftBank, confirmed the investment was by the company itself.

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