China Merchants Bank (CMB) will invest $200 million in ride-hailing company Didi Kuaidi and provide financing to the firm’s drivers for them to purchase cars by installment.
Didi, China’s most popular taxi-hailing service, announced a strategic partnership with CMB to offer financing to drivers and enable the bank’s customers to pay for rides using their credit cards, the South China Morning Post reported.
The bank’s investment is part of a $3 billion fundraising round that values the firm at an estimated $16.5 billion.
Didi president Liu Qing said it is looking for investors that can provide more than just money as it moves to expand rapidly in the face of increased competition in China from rival Uber. After a recent fundraising round, its China unit was valued at $7 billion. Earlier this month a group of Chinese investors put nearly $2 billion into Uber.
Didi, which confirmed in September it had raised $3 billion, has funding from Chinese e-commerce giant Alibaba, China’s largest internet company Tencent, China Investment Corp, Capital International Private Equity Fund, Ping An Ventures, Temasek and Coatue Management.
It operates in 360 cities, with as many as six million active drivers, and claims more than 200 million users, who take about four million trips a day using the service.
In early December Didi partnered with three other ride-hailing firms — US-based Lyft, India’s Ola and Southeast Asia’s GrabTaxi – to scale up their services to compete against rival Uber. Users of each app will be able to book transportation in each other’s region. Each company will handle “mapping, routing and payments through a secure API” in the countries they serve, the companies said in a statement.
Didi and Lyft announced a strategic partnership in September to “make it easier for people to get reliable rides when they travel between the US and China”. The Chinese firm invested $100 million in Lyft as part of a financing round led by Rakuten earlier this year that also included Carl Icahn, Alibaba and Tencent.
In September Didi also invested in Ola, which operates in 102 cities in India and has about an 80 per cent share of the taxi-hailing business. It raised an estimated $500 million from Didi, SoftBank, Falcon Edge, Singapore sovereign wealth fund GIC and Tiger Global Management.
Didi in August invested in Southeast Asian transport app GrabTaxi, which raised more than $350 million. GrabTaxi said it has 110,000 drivers on its platform with 11 bookings made per second.