China-based ride hailing app Didi Chuxing is considering taking a $6bn investment from telecommunications and internet group SoftBank, Bloomberg reported yesterday, citing people familiar with the matter.
Originally made up or rivals Didi Dache and Kuaidi Dache before a merger in early 2015, Didi Chuxing is the overwhelming leader in China’s on-demand ride market and agreed to acquire the Chinese subsidiary of US-based Uber in August 2016 for $7bn in cash and stock.
The company has raised approximately $10.5bn in debt and equity altogether and now has more than 100 investors according to Bloomberg. They include electronics producer Apple, e-commerce firm Alibaba, internet group Tencent, contract manufacturer Foxconn and SoftBank.
Although the funding would be the largest investment ever made in a venture capital-backed company, Didi Chuxing is hesitant because it needs to balance the requirements of its existing backers, the sources told Bloomberg.
Tencent, a shareholder in the company since 2013, and Apple are both considering joining the round in order to maintain the size of their respective stakes in Didi Chuxing, which was valued at $33.7bn as of a $120m investment by Foxconn in September 2016.
The prospective funding would likely go to autonomous vehicle technology development, which Didi Chuxing is exploring as it seeks to keep pace with international firms such as Apple and internet technology group Alphabet, both of which are working on their own offerings.
Didi Chuxing has also begun making strategic investments, providing substantial sums for international counterparts Lyft, Ola and 99 as well as domestic bicycle sharing service Ofo.
The sources did not tell Bloomberg whether the capital would come from SoftBank directly or from the $100bn Vision Fund it expects to shortly close with $75bn of external investment. The news mirrors reports last week that SoftBank was planning a $1bn investment in Singapore-based ride ordering app Grab.