China-based ride hailing service Didi Chuxing spun off an autonomous driving technology developer on Friday with more than $500m from a funding round led by telecommunications and internet group SoftBank’s Vision Fund 2.
Didi began testing autonomous driving software in 2016 and channelled it into a separate entity in September 2019.
The funding will be used to help the company expand research and development spending, conduct more tests on the technology and form additional partnerships within the automotive industry as it looks to bring the introduction of the technology within China nearer.
The partnerships in question would focus on the mass production of driverless vehicles which would hypothetically reduce the costs of Didi’s business significantly while utilising its fleet management and passenger safety experience.
Didi has received regulatory approval to test its technology in three Chinese cities in addition to the US state of California. The subsidiary has partnerships in place with Didi’s auto repair and maintenance subsidiary, Xiaoju Automobile Solutions, and financial services platform Didi Finance.
Didi itself had raised $18.3bn in debt and equity financing from investors including SoftBank Vision Fund as of July 2019, and reports in March this year suggested the fund was close to agreeing to lead a $300m round that would ease the stress caused by the Covid-19 lockdown and attendant drop in business.
SoftBank joined venture capital firm Legend Capital to invest $150m in another SoftBank spinoff, bicycle rental service Qingju, in April 2020.
