The taxi-hailing apps backed by Alibaba and Tencent are looking to raise $1.5 billion to fend off an aggressive move by Uber to invest CNY7 billion ($1.1 billion) in China this year and expand operations from 11 cities to more than 50 cities.
Didi Dache (Taxi) and Kuaidi Dache, the two leading taxi apps in China, merged back in February to create Didi Kuaidi, the world’s largest smartphone-based taxi service valued at an estimated $6 billion at the time. The company continues to run separate apps but has combined their technology and data.
The investments from new and existing investors will value Xiaoju Kuaizhi, the Cayman Islands holding firm that runs the combined firm, at $12 billion to $15 billion, a source told the Taipei Times.
Didi Kuaidi, which operates in 360 cities in China, has 1.35 million drivers who make about four million trips per day. It claims more than 200 million users. Didi earlier announced it would give away CNY1 billion worth of rides to compete against Uber and Yidao Yongche, another service that also operates in China.
Uber started operations in China in February last year and said business has doubled over the past month, with almost one million trips a day in May.
The company was reportedly partnering with China’s internet search and maps provider Baidu, and private equity firm Apax Partners, to bid for Nokia’s mapping unit HERE a month ago. Previously, Uber bid as much as $3 billion to acquire the unit.
Uber also reportedly was in talks last month with several banks about a $1 billion credit line, a move that may be a step towards launching an IPO.