China-based ride hailing service Didi Chuxing has spun out its self-driving vehicle division with an as-yet undisclosed name, the Financial Times reported yesterday.
Didi Chuxing hopes the spinout will attract investors as its own loss-making operation faces a downturn of venture capital activity in China. It did not specify the size of the stake it will look to maintain in the spinout or how much capital it may have invested.
The unit was formed in 2016 and currently employs more than 200 staff. It secured regulatory approval for testing its technology in California in 2018.
Zhang Bo, the current chief technology officer of Didi Chuxing, will run the new business as chief executive, with the support of chief operating officer Meng Xing, a former executive director at venture capital firm Shunwei China Internet Fund.
The spinoff will focus on research and development activities, while also seeking strategic cooperations with automotive manufacturers and other industry partners.
Didi’s decision follows a similar move by US-based peer Uber, which spun off its autonomous driving unit, Advanced Technologies Group, in April 2019 with $1bn in funding from internet and telecommunications group SoftBank’s Vision Fund, carmaker Toyota and automotive parts producer Denso.
Didi Chuxing has raised approximately $18.3bn in equity and debt financing to date, most recently securing $600m from Toyota last month as part of a strategic partnership agreement that reportedly valued the company at around $62bn.
The company’s investors include SoftBank, e-commerce firm Alibaba and its financial services affiliate Ant Financial, internet group Tencent, car rental service eHi, travel services provider Booking Holdings and consumer technology producer Apple as well as insurance firms China Life and Ping An.
