Didi Chuxing, a China-based ride-hailing application, has this month raised more than $5.5bn from a consortium including SoftBank, Tencent, Alibaba and Apple.
It is the largest round of funding yet for a technology company, and could reportedly value the company at $50bn. This valuation would make Didi Chuxing the second-most valuable startup in the world behind US-based peer Uber.
Taking into account the capital raised by its predecessor companies, Didi Chuxing has so far secured more than $13bn in equity funding and $2.8bn in debt financing, the latter coming alongside a $4.5bn equity round closed in July 2016.
Qing (Jean) Liu, president of Didi Chuxing, has been behind much of Didi’s rise and was reportedly behind US-listed technology firm Apple’s decision to invest $1bn in Uber. She joined Didi in July 2014 as chief operating officer when the company was two years old and was instrumental in last year’s $7bn takeover of Uber’s Chinese operation in return for the US company taking a 20% stake in the merged business. Didi also invested $1bn in Uber.
Earlier, in 2015, she led the strategic merger of Didi Dache and its main competitor Kuaidi Dache to form Didi Chuxing. Now, she has been preparing its shift towards autonomous driving and artificial intelligence and machine learning, plus international expansion with corporate venturing an important tool.
Less than a sixth of China’s population owns a car, so taxis are a popular form of transport. Didi’s platform completed 1.43 billion rides in 2015, spread over 300 million users in 400 Chinese cities.
This is a far cry from when, in May 2013, Tencent invested $15m for a 20% stake in Beijing-based Didi Taxi’s series B round, at an estimated $60m valuation. Back then, the Didi Taxi mobile phone app had just entered the Shanghai market with 5,000 new orders from the city every day.
With another $5.5bn under its belt, Didi is preparing its global strategy. Cheng Wei, founder and chairman of Didi Chuxing, in a statement alongside its $100m series D round for Brazilian counterpart 99 earlier this year said: “We seek to work with new global partners to ensure the creation of new and better mobility services, as well as generating new job opportunities for our cities as we reshape the future of the transport system in the world.”
Founded in 2012 as 99Taxi, 99 operates a ride service that offers taxis and chauffeured cars to customers in 550 cities and towns in Brazil. More than 140,000 drivers are registered and the company’s app has been downloaded more than 10 million times. Didi Chuxing will take a seat on 99’s board and provide strategic assistance with product development, operations and business planning.
Elsewhere, Ola, an India-based on-demand ride service backed by Didi, has raised up to $100m from its existing investors, according to a regulatory filing.
Didi has its sights set beyond cars. Didi took part in a $450m series D round for app-based bicycle rental service Ofo, valuing Ofo at more than $1bn. China-based Ofo enables users to unlock bikes using smartphones.
Liu’s Beijing office is in Zhongguancun, China’s answer to California’s Silicon Valley. In a profile for news provider Financial Times, Liu, who is still under 40, “has spent her life bouncing from elite institution to elite institution in a dizzying spiral of success”.
Liu was born in 1978 into what the Financial Times referred to as “Chinese tech royalty”, as the daughter of Liu Chuanzhi, who founded Lenovo, the computer maker that bought IBM’s personal computer (PC) business in 2005 and subsequently became the largest PC maker in the world. She told Financial Times: “My father said one thing that has stayed with me: ‘It is supposed to be hard.’ When you have that mentality, you find nothing is so difficult. Then you actually start to enjoy it and have fun.”
Graduating from Peking University with a degree in computer science, she went on to do a master’s at Harvard, followed by 12 years at Goldman Sachs, mostly in Hong Kong, where she worked with Martin Lau and James Mitchell, senior executives at another of Didi’s investors, Tencent.
But while gender discrimination remains generally common in China, Liu told Financial Times she had never experienced discrimination while at Goldman Sachs nor at Didi and “my feeling is that there are more women in China in tech than in other industries”.
A study by the Cyberspace Administration of China quoted by Financial Times estimated women started 55% of internet companies in the country, compared with 22% of startups in the US, according to research by Vivek Wadhwa and Farai Chideya, authors of Innovating Women.
Liu added: “In the internet era, the key to a successful business is understanding the customers’ expectations – and half the customers are women.”
And she told Financial Times her own observations had helped. Cheng Wei might have recruited her by taking her and other senior executives on a road trip to Tibet but navigating Chinese streets with small children she had found the state-regulated taxi services maddening.
She said: “When I first moved back to China from Hong Kong, I often found myself stuck with my kids trying to hail a taxi. At that time, in 2012, obviously, there were no choices for people like us.”
While there might be further headwinds and hard work ahead with government regulations potentially affecting Didi’s army of drivers, now there are choices.
