China News Startups

More $$$ for Didi Chuxing as Foxconn puts in $120Mn

Didi Chuxing, didi

Chinese cab-hailing behemoth Didi Chuxing has managed to raise yet another round. This time, Taiwanese electronics manufacturer Foxconn has invested a sum of US $119.9 million in Didi Chuxing. The investment has been made through one of Foxconn’s subsidiaries and has the potential to lay the foundation for yet another major collaboration.

The deal is expected to put a valuation of around US$33.7 to Didi, according to a post by Reuters. The Chinese behemoth has said that the companies are together exploring possibilities, however,  no concrete plans or roadmap has been agreed upon as of now.

A stock exchange filing by Hon Hai Precision Industry Co Ltd pertaining to the matter has already been made. Hon Hai Precision Industry Co in case you are unaware of it, is actually the trading name of Foxconn. After this investment, the Taiwanese giant’s subsidiary Foxteq Holdings Inc will own a somewhere around 0.355 percent of Didi. USD 120 million for just .355 percent of a startup! — Yet another testament to Didi Chuxing’s valuation, which has been reaching new heights lately.

The investment further enhances Didi’s portfolio of investors.  The increasingly long list now includes Apple Inc, Tencent Holdings Ltd, Alibaba Group Ltd, Baidu Inc and more recently,  Uber Technologies Inc. Quite Interestingly, we are seeing the formation of a group of corporations, all of which are closely related to each other through financial ties.

For example, Foxconn already holds stakes in Future Mobility — which also has Tencent as one of it’s backers — which is a venture associated with green energy cars, that has been aiming to take upon the likes of Tesla. Foxconn is also the main assembler of iPhones For Apple, which is also one of Didi’s main global backers.

The investment comes at a time when Didi Chuxing’s purchase of Uber China last month is running into trouble with China’s Ministry of Commerce. The government is investigating allegations that the said deal violated the country’s antitrust law. Should the deal pass through these investigations, a huge cab-hailing entity would be created that would hardly have any comparable competitor in the region. Assuming that it happens, Uber will receive 5.89% stakes of the combined company with preferred equity interests.

The fallout from the Uber-Didi deal has reportedly forced Lyft –a company with close financial and strategic ties with Didi — into a tough position as its chief ally decided to merge with it’s arch-rival, following months of rivalry and huge fund-raising bouts. Lyft is apparently on the lookout for buyers.

Regardless of the allegations and the government probe, Didi Chuxing appears to be doing well after it’s Uber China acquisition. The Foxconn investment, which comes after yet another undisclosed investment by the State-owned China Post Group in August, is further proof of investor’s confidence in the China’s most valuable startup.

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