Internet and telecommunications group SoftBank is close to sealing an agreement to lead a $300m funding round for China-based on-demand ride provider Didi Chxuing, The Information reported yesterday.
The other prospective participants in the round have not been revealed. The Information cited people with knowledge of the situation, and Technode confirmed the news with a person close to the matter.
Didi runs a ride hailing service with more than 550 million registered users across Asia, Latin America and Australia. It offers a range of lift options including an urban bicycle sharing service, in addition to automotive insurance.
However, like many of its peers, Didi is set to be heavily affected by the Covid-19 pandemic, as increasing numbers of citizens across various nations are instructed to stay indoors and not travel.
The news was reported the same day as SoftBank announced plans to divest $41bn in assets in order to reduce its debt and finance share buybacks. It has not revealed what those assets will be but they may hypothetically include some corporate venturing stakes.
Bloomberg reported last week that SoftBank was seeking $5bn from external backers that would be added to $5bn from its balance sheet to support portfolio companies of its Vision Fund, one of which would be Didi.
The company had received a total of $18.3bn in debt and equity financing as of July 2019 when automotive manufacturer Toyota invested $600m at a reported $62bn valuation in connection with a strategic partnership agreement.
SoftBank first invested in Didi as part of a $4.5bn equity round in 2016 that included consumer electronics manufacturer Apple, e-commerce group Alibaba and affiliate Ant Financial, insurance firm China Life, internet group Tencent and investment manager BlackRock.
Didi raised $5.5bn from SoftBank, financial services firms China Merchants Bank and Bank of Communications, and Silver Lake Kraftwerk in 2017 before adding $4bn from investors including SoftBank and Abu Dhabi’s sovereign wealth fund, Mubadala Investment, at a $56bn valuation later in the year.
Other investors in Didi include travel booking platform Booking Holdings, which supplied $500m in 2018, insurer Ping An’s Ping An Ventures unit, which led a $3bn round in 2015, internet company Sina Weibo, China Investment Corp, Capital International Private Equity Fund, Farallon Capital Management and Coatue Management.