China-based ride hailing services provider Didi Chuxing raised $600m from carmaker Toyota today as part of a strategic collaboration agreement to form a joint venture.
Didi Chuxing operates a series of transportation services, including on-demand ride hailing, buses, car rental, food delivery and e-bikes. It has also created a financial services platform.
The company was formed through the merger of Didi Dache and Kuaidi Dache in 2015 and subsequently acquired US-based competitor Uber’s local subsidiary. Having initially focused on the Chinese market, it has since expanded internationally into markets including Mexico.
The deal valued Didi Chxuing at about $62bn according to the Wall Street Journal. The joint venture will also involve automotive manufacturer GAC Toyota Motor – itself a partnership between Toyota and logistics service provider GAC – and will offer vehicular-related services aimed at drivers for ride hailing platforms, such as car leasing options.
Didi Chuxing and Toyota have been collaborating in the same space since January 2018 and drivers are already able to tap into Toyota’s in-vehicle platform, TransLog, which detects maintenance issues and offers safe-driving guidance.
The joint venture will enable a full-scale implementation of that cooperation in China, while also driving an expanded offering that will include services such as vehicle management, insurance and financing. Toyota also hopes to champion plug-in electric vehicles.
The size of Toyota’s investment in Didi Chuxing was originally expected to be $549m, when reports first emerged two months ago. Didi Chuxing was also rumoured to be seeking a $2bn investment last week, but it remains unclear if Toyota’s commitment forms part of that round.
Didi Chuxing has secured approximately $18.3bn in equity and debt financing to date, including capital secured from e-commerce group Alibaba, telecommunications firm SoftBank, internet company Tencent and car rental service eHi prior to the merger.
Travel services provider Booking Holdings was its most recent investor, injecting $500m in July 2018 at a reported $56bn valuation.
Telecommunications conglomerate SoftBank and financial services firm China Merchants Bank took part in a $5.5bn round for the company in April 2017 together with Bank of Communications and Silver Lake Kraftwerk, before SoftBank joined Mubadala Investment Company for a $4bn deal eight months later.
Alibaba and its financial services affiliate, Ant Financial, had backed a $4.5bn round in 2016 together with SoftBank, Tencent, consumer electronics manufacturer Apple, insurer China Life and Blackrock. It was raised together with $2.8bn of debt financing from China Life and China Merchants Bank.
Ping An Ventures, the corporate venture capital arm of insurance firm Ping An, co-led a $3bn round for the company in 2015 together with China Investment Corp and Capital International Private Equity Fund that also featured Alibaba, Tencent, Temasek and Coatue Management.
