China-based ride hailing service Didi Chuxing’s unnamed autonomous driving technology subsidiary raised more than $500m in a funding round led by telecoms and internet conglomerate SoftBank’s Vision Fund II. This was the first funding round for the software business, though the latter was spun off in September 2019 as a separate company and Didi has reportedly been engaged in testing such technologies since 2016. The funding will help the spinoff company to expand research and development, run additional tests and strike more partnerships within the automotive industry. The news came a few weeks after Waymo, the autonomous driving subsidiary of internet conglomerate Alphabet, raised an additional $750m, bringing its first external round to a total of $3bn.
Such partnerships would focus on mass production of driverless vehicles which would hypothetically reduce the costs of Didi’s core business of ride hailing. Didi has already been granted regulatory approval to test its technology in three Chinese cities (Beijing, Shanghai and Suzhou) as well as in the US state of California. Currently, the autonomous tech subsidiary has signed partnerships with Didi’s auto repair and maintenance subsidiary, Xiaoju Automobile Solutions, and its financial services platform Didi Finance.
The spinoff is part of the dynamic autonomous driving tech space, which has enjoyed much attention from corporate venture investors, as our GCV Analytics bar chart below shows. Though the number of tracked corporate-backed deals has somewhat fluctuated since 2014, the total estimated capital in rounds reached a peak at $6.72bn in 2019, spread over 51 rounds, which suggest rising valuations.
