Today Didi Chuxing, China’s answer to Uber, announced it has closed a $4 billion fundraising round. Details surrounding the deal are scarce, but a source close to the company says that the deal values the company at over $50 billion, and that participants include Mubadala (a fund of the United Arab Emirates government). SoftBank, currently in the process of investing in Uber, confirmed to Quartz that it also participated.
This marks the second major funding round that Didi has closed this year. In April the company announced it had raised $5.5 billion from investors, marking the largest-ever round for a tech company, according to Bloomberg.
Both rounds came after after Didi’s merger with Uber’s China division last year. As part of that deal, Didi purchased Uber’s domestic operations while Uber took a stake in Didi worth roughly 20%. The agreement gave Didi a virtual monopoly over ride-hailing in China. So why is the company still raising billions of dollars?
Since the acquisition, Didi has been steadily expanding beyond its core ride-hailing service.
It has a lab in the United States for artificial-intelligence research, for example, where it’s preparing technology for autonomous vehicles. It’s expanding into car-sharing, a booming trend in China (along with bike-sharing) wherein ordinary people can rent cars by minutes or hours. It’s also building a network of electric-vehicle charging stations across China, and has committed to getting over 1 million “new energy vehicles” in its fleet over the next five years. And it’s also experimenting with various “smart city” initiatives that bring data and technology to public infrastructure—in the western city of Wuhan, for example, Didi has rolled out vehicles that can change lane directions on public roads (link in Chinese) to alter traffic flow.
There are also signs that Didi will expand internationally—if not by launching Didi services directly, than through local entities in other countries. The company has funded Grab in Southeast Asia, Taxify in Africa, and 99 in Latin America, all of which compete with Uber locally. And it is reportedly inking partnerships with taxi dispatch companies in Taiwan and Japan, suggesting that a rollout in those countries could be imminent. These efforts all require cash to fund—and with no serious rivals at home, the company can enter new sectors without much distraction.