US-based ride-hailing app operator Uber, backed by a range of corporates including search engine provider Baidu, is seeking a $1bn round to support expansion efforts in China, the Financial Times reported yesterday.
The Financial Times obtained an internal email with the news, which revealed that the fundraising would officially begin on June 22 and that existing investors are invited to back the new round.
Uber provides a ride-sharing service that enables users to book a ride through a dedicated app.
Uber has committed to increase its presence from a current 11 cities into 50 over the next year in China. The company is already processing a million rides a year in the country.
The round follows last month’s $1.5bn fundraising. The company has been expanding rapidly and has raised at least $5.9bn to date.
Investors include Baidu as we well internet companies Times Internet and Google, Sequoia Capital, TPG, Fidelity Investments, Wellington Management, Kleiner Perkins Caufield & Byers, Menlo Ventures, CrunchFund, Goldman Sachs, Lowercase Capital, First Round Capital and Innovation Endeavors.
However, the company is reportedly not making a profit yet and has faced legal hurdles in several geographies such as Germany, France, Spain, India and indeed China, where authorities raided Uber’s local offices last month.
Uber is also facing competition in China, with Didi Dache-Kuaidi Dache dominating 95% of the market.
Didi-Kuaidi’s backers include e-commerce company Alibaba, internet company Tencent, microblogging platform Sina Weibo, telecom company SoftBank’s subsidiary SoftBank Internet, e-commerce company Alibaba, and car rental firm eHi, among others.
Travis Kalanick, chief executive of Uber, wrote in the email: “To put it frankly, China represents one of the largest untapped opportunities for Uber, potentially larger than the US.
“Success in China, however, takes commitment over the long haul and a strong will, coupled with a unique understanding of the differences in China.”