PLEASE FUND

Uber’s CEO says the company is burning $1 billion a year in China

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Obsession
Getting There

It’s no secret that Uber is burning cash in China, the only question has been how much. The answer, per a recent interview with Uber CEO Travis Kalanick, is more than $1 billion a year.

“We’re profitable in the USA, but we’re losing over $1 billion a year in China,” Kalanick said in a “fireside chat” in Vancouver, according to Betakit. “We have a fierce competitor that’s unprofitable in every city they exist in, but they’re buying up market share.” (Uber didn’t immediately respond to a request for comment on Betakit’s report.)

The fierce competitor that Kalanick is talking about is Didi Kuaidi, the no. 1 taxi and ride-hailing player in China. The funding war between Uber and Didi Kuaidi has escalated over the last few months. Didi Kuaidi is valued at $16.5 billion after securing $3 billion in September. Uber’s China unit closed its own series B round about a month ago, the size and valuation of which weren’t disclosed.

“I wish the world wasn’t that way. I prefer building rather than fundraising,” Kalanick reportedly said at the fireside chat. “But if I don’t participate in the fundraising bonanza, I’ll get squeezed out by others buying market share.”

While there’s no good up-to-date data on how wide Didi Kauidi’s lead is in China, as of August Uber was far behind.

Kalanick is personally overseeing Uber’s expansion in China, which he last summer declared the company’s “top global priority.” The densely populated cities in the Middle Kingdom offer Uber growth potential that it can only dream of in the US. That should help explain why Kalanick is pursuing it so aggressively, despite the tremendous burn rate, and the fact that China is a notoriously tough market for foreign internet companies to crack. Even if Uber never advances past runner up, in China that’s still a pretty good place to be.

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