Chinese ride-hailing giant Didi Chuxing has acquired $500 million for its autonomous vehicle sector in its first fundraising round led by Softbank Vision Fund 2. The round also marks one of the first publicly disclosed investments from Softbank’s Vision Fund 2.
The acquired capital will enable Didi to finance research and development related to autonomous driving technology and testing. Further, the company aims to deepen industry cooperation and expand services in China as well as abroad.
The development of Didi’s self-driving vehicles began back in 2016. Separated into separate unit in August last year, the capital infusion marks the first time that the autonomous vehicle sector has brought in external funding as a standalone unit. Didi Chuxing has invested from its own pocket into the autonomous vehicle unit since inception.
Didi is not short of planned developments of its unit which is part of a growingly lucrative industry. The ride hailing giant plans to launch a multitude of autonomous fleet operations across various locations. Further, the company is looking to cooperate with global auto industry partners for the mass production of self driven vehicles. As of now, Didi has open road testing licences in three locations in China including Beijing, Shanghai and Suzhou as well as California in the U.S.
Further, Didi aims to integrate mobility solutions, including smart charging networks, fleet maintenance service, and insurance programmes for autonomous fleets. Pertaining to the proposed plans, the company is working with Xiaoju automobile solutions and Didi Finance.
As of now, Didi serves a total of over 550 million users through its ride hailing service. The company plans to use the transportation data attained from this enormous figure to run simulation tests. This, according to Didi could improve the efficiency of its research and aid algorithm iteration.
For Softbank, the investment comes in the midst of its efforts to sell off stake post dramatic losses linked to its Vision Fund 1. Given the condition of its earlier investments, the self-driving sector seems to be the rightful area to invest in. A highly lucrative industry, autonomous vehicle technology has remained popular among investors despite the pandemic. Google-parent Alphabet’s Waymo only recently raised an additional $750 million in its external investment round while China’s Pony.ai raised $462 million in a round led by Toyota motors.