Right at a time when its US rival Uber is starting to shift into its top gear, China’s largest taxi app firm Didi Kuaidi announced that it plans to raise an hefty amount of $1.5 billion, in a move which will value the company between $12 billion and $15 billion.
Kuaidi Dache, backed by Alibaba, and Tencent-backed Didi Dache, merged in February to create a joint venture. Didi Kuaidi is jointly overseen by both firms’ management teams, and still maintains separate products and branding.
Didi has raised over $800 million so far while Kuaidi has raised over $700 million.
This new fund raise planned by Didi Kuaidi underscores the stiff competition in Chinese taxi market and would eventually be used to fight off Uber, which recently announced that it is investing $1 billion in China as part of an aggressive plan to expand into 50 further cities.
Despite of infinite hurdles from regulators and local competitors, Uber claims to have established itself in China and eyes an aggressive expansion, that would eventually make China as its largest market globally.
The Didi-Kuaidi joint venture has its presence in around 300 cities and holds a major proportion of Chinese ride hailing market. Didi was estimated to have a roughly 55 percent market share, with Kuaidi claiming nearly all of the rest in a December study by Analysis International.
Uber currently operates in 11 populated cities and received significant financial backing of an undisclosed amount in December last year from Baidu.