News flash from the world of the always-raising, ride-on-demand companies in China — one of them is raising. Again.
Didi Kuaidi, the company that has left Uber eating its dust in China, is currently in the midst of securing $1 billion in additional fundraising, according to the Wall Street Journal and Bloomberg. We've corroborated those reports with a source close to the deal, who told TechCrunch — like both publications — that round is not yet closed, is apparently over-subscribed, and will value the company at over $20 billion.
Didi Kuaidi is no stranger to investor cash. Last year, it raised $3 billion (at a $16.5 billion valuation) to push on with its battle against Uber. That 2015 round started out at $2 billion before additional interest pushed it up, and we understand that the same could happen with the round that is currently on the burner.
Didi Kuaidi, which was formed a year ago when China's top two on-demand services merged, is ahead of Uber based on total coverage of China among other metrics. The company's array of transportation options — which includes registered taxis, Uber-style peer-to-peer rides, shuttle buses, and chauffeur services — are available across more than 360 cities and towns in China. Uber, by contrast, was in 22 cities at the end of 2015, although it recently kicked off a series of aggressive expansions aimed at increasing it to 100 locations by the end of this year.
Further, Didi Kuaidi is also ahead on rides completed per day. A company spokesperson told TechCrunch that across all of its services it is now handling 10 million bookings per day, of which around half are (Uber-style) private car rides. Uber, for the sake of comparison, was at 1 million car rides per day in China as of last summer.
Uber China, which is a separate division to Uber Inc (global), has also been actively raising. It closed an undisclosed amount — beyond its initial goal of $1.2 billion — at a $7 billion valuation in January.
Didi Kuaidi's spokesperson said that, of this month, it still had $3 billion left in the bank from previous rounds, so why does it need to raise even more money?
Uber's argument is simple. It believes its rival is burning so much money that it needs to keep topping its balance up. Uber CEO Travis Kalanick said as much last week in an interview with Betakit in which he branded Didi Kuaidi "a fierce competitor that's unprofitable" and, through a subsidies battle, is chiefly responsible for Uber investing $1 billion per year in China.
In the other corner of the king, Didi Kuaidi claims that it is raising money for opportunities, and, well, because it can. (It also countered Kalanick's claim on being unprofitable by reiterating a previous statement that it is at break-even in a number of its largest cities.)
The company wants to invest in its technology — so improving wait times, synchronizing its fleet, and more — while there are also "platform-based synergies" that it can tap into across its range of services. Acquisitions, perhaps fueled by its alliance with fellow Uber rivals Lyft, Ola and Grab, aren't being ruled out but are not a priority, we understand.
I'm going to go out on a limb here and say that this probably isn't the last billion-dollar funding round from a ride-on-demand company in China this year. There's plenty more to come from this battle.
This article by Jon Russell originally ran on TechCrunch, a leading technology media property, dedicated to obsessively profiling startups, reviewing new Internet products, and breaking tech news.