China-based on-demand ride service Didi Chuxing is getting near to raising up to $6bn at a $50bn valuation from investors including telecommunications firm and existing backer SoftBank, undisclosed sources have told Reuters.
Private equity firm Silver Lake Partners and financial services firms China Merchants Bank and Bank of Communications are also set to take part. The news follows people familiar with the matter telling Bloomberg the company was looking to raise “at least” $5bn at the same valuation.
The round would value the company at “at least” $50bn, making it the second most valuable VC-backed private company in China, behind online financial services provider Ant Financial, and could close this week, sources had told Bloomberg.
Formed in early 2015 by the merger of China’s two largest ride hailing companies, Didi Chuxing operates a service that now includes taxis, carpooling, chauffeured cars, bus travel and vehicle rental, and which serves about 400 million users across the country.
The company’s largest rival has been US-based counterpart Uber’s Chinese subsidiary, but it swallowed up Uber China in a $7bn deal in August 2016 that gave the acquired company’s investors a 20% share in Didi Chuxing, which invested $1bn in Uber as part of the agreement.
Having now entered more than 400 Chinese cities, Didi Chuxing intends to use the new funding for international expansion, and additional capital will be put into developing autonomous driving and artificial intelligence technology.
Taking into account the capital raised by its predecessor companies, Didi Chuxing has so far secured about $7.7bn in equity funding and $2.8bn in debt financing, the latter coming alongside a $4.5bn equity round closed in July 2016.
SoftBank took part in that round alongside hardware producer Apple, which invested $1bn, e-commerce firm Alibaba and its financial services affiliate Ant Financial, internet group Tencent, insurer China Life, state-owned holding company Poly Group and asset manager BlackRock.
Other investors in Didi Chuxing include contract manufacturer Foxconn, which invested $120m in September 2016, insurance group Ping An, Temasek, China Investment Corp, Capital International Private Equity Fund, Citic Capital and Coatue Management.
– This article was changed on April 28 to reflect the Reuters report