Beijing, Jul 8: China's homegrown taxi-hailing app service giant Didi Kuaidi today said it has raised USD two billion in two weeks, boosting its cash reserves to offer stiff competition to US-based Uber.
With the newly-added USD two billion, Didi Kuaidi will increase its cash reserves to above USD 3.5 billion, state-run Xinhua news agency reported about the fundraising round that came within a month after reports of Uber planning to invest over USD 1 billion besides beginning operations in 50 Chinese cities emerged.
Backed by technology giants like Alibaba and Tencent, it had previously raised the financing target and is now looking to pool a further "few hundred million dollars" from new investors before the final closing in the coming month due to strong demand from existing and new investors, the report said.
"The fact that global investors are eager to participate in this fundraising round shows their confidence in the development of our company," Cheng Wei, chief executive officer and chairman of the company, said in a statement.
Didi Kuaidi will use the raised amount to strengthen its market position, develop new services, improve technology and data research and enhance user experience, the statement said.
Existing stakeholders such as Alibaba, Tencent, Temasek and Coatue Management participated in the fundraising, while Capital International Private Equity Fund, Ping An Ventures, and several other globally renowned investors have invested in this round of fundraising, the company said in a statement.
The fundraising by the company, that holds the largest market share of car-hailing apps in China, started after Kaudi merged with another local successful taxi app Didi Dache.
Didi Kuaidi had previously raised the financing target and is now looking to pool a further few hundred million dollars from new investors before the final closing in the coming month due to strong demand from existing and new investors, state-run Xinhua news agency reported.
With millions of people using taxi-hailing apps in China everyday, competition for ride-hailing market is growing as the US company Uber Technologies Inc. started its formal fundraising specifically for its China operation.
Uber, which launched operations in China last year, has a small but growing market share in China. However, Didi Kuaidi has "clear competitive advantages" built "through its integrated platform, technology and team" and the company is in a far better position to benefit from this tremendous opportunity than any other player in the mobile transportation industry in the world," Cheng said.
Didi Kuaidi is trying to broaden its offering to Chinese riders by expanding its premium car services and a carpool offerings from its previous focus on the taxi market.
Didi Kuaidi now serves three million daily rides and covers 80 cities with private car services, with a 80 per cent of the market share, and a 90 per cent share, or three million daily rides, for taxi-hailing market, according to data from Analysys International.