Didi Kuaidi beats Face­book as it raises $2b in record fundrais­ing drive

China Daily (Canada) - - FRONT PAGE - By MENGJING mengjing@chi­nadaily.com.cn

Didi Kuaidi, China’s largest mo­bile-based car-book­ing com­pany, said on Wed­nes­day that it had raised $2 bil­lion from its latest round of fundrais­ing, with even more pow­er­ful in­vestors on board.

With a claimed cash re­serve of about $3.5 bil­lion and the goal of build­ing it­self into a one-stop trans­porta­tion ser­vice provider, Didi Kuaidi is ex­pected to trig­ger more com­pe­ti­tion in China’s al­ready highly com­pet­i­tive online car-book­ing mar­ket.

Bei­jing-based Didi Kuaidi said at a news con­fer­ence that it had en­coun­tered tremen­dous in­ter­est from global in­vestors, in­clud­ing Cap­i­tal In­ter­na­tional Pri­vate Eq­uity Fund, Ping An Ven­tures and Te­masek, and it is look­ing to raise a fur­ther few hun­dred mil­lion dol­lars from new in­vestors be­fore the fi­nal clos­ing in the com­ing month.

The huge amount of fund­ing makes Didi Kuaidi the mo­bile In­ter­net com­pany that pooled the most money in a sin­gle round of fundrais­ing. In 2011, Face­book Inc raised $1.5 bil­lion and Airbnb Inc raised $1.5 bil­lion in its fundrais­ing round.

“Burn­ing” the huge amount of cash on of­fer­ing fi­nan­cial in­cen­tives and lur­ing users from ri­vals is not go­ing to be the fo­cus of the com­pany’s next move, said Liu Qing, pres­i­dent of Didi Kuaidi. She said that the firm would pour the money into re­search and de­vel­op­ment to make the app the “ev­ery­thing store” in trans­porta­tion ser­vice.

Rather than hav­ing sep­a­rate apps for dif­fer­ent kinds of car-book­ing ser­vices, Didi Kuaidi has in­te­grated var­i­ous trans­port so­lu­tions, in­clud­ing taxi-hail­ing, pri­vate cars and ride-shar­ing, into one app and it plans to add car­pool­ing, chauf­feur and bus ser­vices in the fu­ture.

“Chi­nese users have diver­si­fied needs in trans­porta­tion and we want them to ful­fill ev­ery sin­gle de­mand on our plat­form rather than in­stall seven dif­fer­ent apps for seven dif­fer­ent types of trans­porta­tion de­mand,” said Liu.

To reach the goal, Didi Kuaidi has started to seek tal­ent around the world to en­sure its plat­form can be in­tel­li­gent enough to fig­ure out what kind of ser­vice in­di­vid­ual users want based on their pre­vi­ous car-hail­ing records.

De­spite mar­ket spec­u­la­tion that DidiKuaidi may in­vest in GrabTaxi to ex­pand to the online ride-hail­ing mar­ket in South­east Asia, the com­pany said it is go­ing to use most of its $3.5 bil­lion cash re­serves in the Chi­nese mar­ket.

With such con­cen­tra­tion and such a warch­est, Didi Kuaidi is ex­pected to leave an even smaller share of mar­ket to its com­peti­tors, in­clud­ing the San Fran­cisco-based Uber Tech­nolo­gies Inc, said Zhang Xu, an an­a­lyst with Analysys In­ter­na­tional.

Ac­cord­ing to a re­port from Bloomberg, Baidu Inc-backed Uber is seek­ing to raise as much as $1 bil­lion for its Chi­nese busi­ness so that it can spend it on gain­ing cus­tomers from Didi Kuaidi.

Wang Xiaofeng, an an­a­lyst at For­rester Re­search Inc, said that the in­te­grated plat­form model would not only give Didi Kuaidi an edge to com­pete with other ri­vals but a bet­ter way to make a profit in the fu­ture.

“Peo­ple tend to spend more time on plat­form-model apps, such as WeChat and Ali­pay. The more func­tions one app has, the more time its users will spend on it,” she said.

“If Didi Kuaidi can ac­tu­ally pull it off, it­may be­come a new gate­way link­ing car-hail­ing ser­vice users with third-party ser­vices providers. It can even sell cars and in­sur­ance in the fu­ture.”

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