24 August 2019
A taxi driver uses a Didi Dache app to locate a passenger in Beijing. Photo: Xinhua
A taxi driver uses a Didi Dache app to locate a passenger in Beijing. Photo: Xinhua

China taxi-hailing app valuation rises to US$8.75 bln

China’s dominant taxi-hailing app Didi Dache-Kuaidi Dache now has a valuation of US$8.75 billion valuation after US hedge funds bought into the business.

Coatue Management LLC is leading a consortium of investors buying about US$600 million of shares in the combined company, the Wall Street Journal reported, citing unnamed sources.

Coatue is buying about US$250 million of common shares of the Chinese startup while Farallon Capital Management LLC is snapping up about US$75 million.

Other institutional investors and insiders are taking the remainder of the shares, the sources said.

The US$600 million stake being sold is a portion of the common shares in the combined company currently owned by Kuaidi Dache’s management team, according to the newspaper.

The deal increases the value of the business to US$8.75 billion, nearly 50 percent higher than the previous valuation of about US$6 billion, which was based on fundraisings in recent months.

Still, Didi Dache-Kuaidi Dache’s current valuation is much lower than that of global ride-hailing app Uber Technologies Inc., which is now valued at US$41 billion.

Investors expect the two companies will now turn from competing against each other to offering a range of new services.

About 99 percent of taxi rides booked through an app in China are made using either Didi Dache or Kuaidi Dache, the report said.

Didi Dache and Kuaidi Dache merged in February in a US$6 billion deal after neither firm was able to force the other out of the business.

They will continue to operate under separate brands with their own apps, the report said.

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